Exhibit 99.1


































BROOKFIELD
PROPERTIES CORPORATION




RENEWAL
ANNUAL INFORMATION FORM










MARCH
12, 2010





































ANNUAL
INFORMATION FORM




TABLE
OF CONTENTS




Notes
      Regarding This
      AIF
              1Note
      Regarding Financial Information
              1Stock
      Splits
              1Forward-Looking
      Statements
              1Corporate
      Structure
              2Name,
      Address and Incorporation
              2Intercorporate
      Relationships and History
              2General
      Development of the Business
              6Acquisitions
      and
      Dispositions
              6Development
              7Financings
      and Refinancings
              7Equity
              7Other
              8Business
      of Brookfield Properties
              9Overview
              9Commercial
      Property
    Operations
              9Commercial
      Development
              11Residential
      Development
              11Prudent
      and Flexible Capital Plan
              12Primary
      Markets and Properties
              15Service
      Businesses
              31Employees
              31Environmental
      Protection
              31Company
      and Real Estate Industry Risks
              32Dividends
      and Dividend Policy
              41Description
      of Capital Structure
              41General
      Description of Capital Structure
              41Ratings
              42Market
      for Securities
              43Directors
      and Officers
              46Directors
              46Officers
              47Share
      Ownership
              48Legal
      Proceedings
              48Interest
      of Management and Others in Material Transactions
              48Auditors,
      Transfer Agent and
      Registrar
              48Audit
      Committee Information
              49Relevant
      Education and
      Experience
              49Pre-Approval
      Policies and Procedures
              49External
      Auditor Service Fees (By Category)
              50Additional
      Information
              50Appendix
      A –
      Subsidiaries
              51Appendix
      B – Commercial Properties by
      Region
              55Appendix
      C – Summary of Terms and Conditions of Authorized
      Securities
              58Appendix
      D – Audit Committee Charter
              81










NOTES
REGARDING THIS AIF




In this
Annual Information Form (“AIF”), “BPO”, “we”, “us” and “our” refers to
Brookfield Properties Corporation and its consolidated subsidiaries, unless
otherwise noted or the context requires otherwise.




Note
Regarding Financial Information




Financial
data included in this AIF has been prepared in accordance with Canadian
generally accepted accounting principles (“GAAP”).  All dollar
references, unless otherwise stated, are in U.S. dollars. Amounts in Canadian
dollars are identified as “C$”.  This AIF should be read in
conjunction with our management’s discussion and analysis and audited
consolidated financial statements and appended notes each of which appear in our
annual report. Unless otherwise indicated, the statistical and financial data
contained in this AIF are presented as at December 31, 2009.




Stock
Splits




On
February 12, 2007, our Board of Directors approved a three-for-two stock
split.  The stock split was in the form of a subdivision of shares
with shareholders holding three BPO common shares, following the stock split,
for every two common shares previously held.  Fractional shares were
paid in cash at the prevailing market price.  The stock split occurred
on April 27, 2007.   In addition, on February 9, 2005, our Board
of Directors approved a three-for-two stock split. The stock split was in the
form of a stock dividend.  Shareholders received one BPO common share
for every two common shares held.  Fractional shares were paid in cash
at the prevailing market price.  The stock dividend was paid on March
31, 2005.  All common share information contained in this AIF has been
adjusted to give effect to both of these stock splits, other than the historical
common share information found under the heading “Corporate Structure –
Intercorporate Relationships and History”, or as otherwise
indicated.




FORWARD-LOOKING
STATEMENTS




Certain
statements contained in the “General Development of the Business” and “Business
of Brookfield Properties” sections of this AIF constitute forward-looking
statements and information within the meaning of applicable securities
legislation. These forward-looking statements reflect management’s current
beliefs and are based on assumptions and information currently available to
management.  In some cases, forward-looking statements can be
identified by terminology such as “may”, “will”, “expect”, “plan”, “anticipate”,
“believe”, “intend”, “estimate”, “predict”, “forecast”, “outlook”, “potential”,
“continue”, “should”, “likely”, or the negative of these terms or other
comparable terminology.  Although management believes that the
anticipated future results, performance or achievements expressed or implied by
the forward-looking statements and information are based upon reasonable
assumptions and expectations, the reader should not place undue reliance on
forward-looking statements and information because they involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of BPO to differ materially from
anticipated future results, performance or achievements expressed or implied by
such forward-looking statements and information.  Factors that could
cause actual results to differ materially from those set forth in the
forward-looking statements and information include, but are not limited to,
general economic conditions; local real estate conditions, including the
development of properties in close proximity to our properties; timely leasing
of newly-developed properties and re-leasing of occupied square footage upon
expiration; dependence on tenants’ financial condition; the uncertainties of
real estate development and acquisition activity; the ability to effectively
integrate acquisitions; interest rates; availability of equity and debt
financing; the impact of newly-adopted accounting principles on our accounting
policies and on period-to-period comparisons of financial results, including
changes in accounting policies to be adopted under International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board; and other risks and factors described from time to time in the documents
filed by us with the securities regulators in Canada and the United States,
including in this AIF under the heading “Business of Brookfield Properties –
Company and Real Estate Industry Risks.” We undertake no obligation to publicly
update or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, except as required by
law.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 1




CORPORATE
STRUCTURE




Name,
Address and Incorporation




Brookfield
Properties Corporation was formed under the Canada Business Corporations
Act on September 5, 1978 to continue the business of Canadian Arena
Corporation which was incorporated in 1923 under the Quebec Companies Act,
1920.  Our articles have been amended from time to time to
change our capital structure and to make the following name changes:
Carena-Bancorp Holdings Inc. - Le Holding Carena-Bancorp Inc. (November 1978),
Carena-Bancorp Inc. (January 1985), Carena Developments Limited
(March 1989) and finally to Brookfield Properties Corporation (May
1996).  Our articles were restated on September 5,
2002.




Our
registered office is P.O. Box 770, Suite 330, Brookfield Place, 181 Bay Street,
Toronto, Ontario, M5J 2T3.  We operate head offices at Three World
Financial Center in New York, New York and Brookfield Place in Toronto,
Ontario.




Intercorporate
Relationships and History




Our
principal subsidiaries and the cities where they own properties are set out
below.  All interests are 100% ownership interests unless otherwise
indicated.  Our principal subsidiaries and their jurisdiction of
formation are listed in Appendix A
hereto.









BPO has
been active in various facets of the real estate business since the
1960’s.  Canadian Arena Corporation, the predecessor company to BPO,
built the Montreal Forum in 1924 to provide facilities for hockey and other
sporting and cultural events and its earnings were derived principally from the
ownership of the Montreal Forum and the Montreal Canadiens of the National
Hockey League until the sale of the franchise in 1978.




In 1976,
a subsidiary of BPO, then called Carena Properties, expanded its real estate
interests by acquiring a controlling interest in one of Canada’s largest public
real estate companies, Trizec Corporation Ltd.  The steady escalation
in commercial property values over the next ten years provided the capital base
to expand BPO’s residential land development and home building
activities.  In 1990, a strategic decision was made to invest capital
in the premier office property business in select, high-growth,
supply-constrained markets in North America.




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| Brookfield Properties Corporation | 2010 Annual Information Form
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The
accumulation of these assets was completed through various corporate and
property purchases, including six major portfolio acquisitions:




BCE
Inc.




In 1990,
BPO acquired a 50% interest in a portfolio of office properties in Toronto,
Denver and Minneapolis from BCE Inc.  In 1994, this interest was
increased to 100%.  Brookfield Place, BPO’s flagship office complex in
Toronto, was acquired in this transaction and our portion of the property is
owned through Brookfield Properties Ltd., an Ontario corporation.  The
Denver and Minneapolis assets are held through Brookfield Commercial Properties
Inc., a Minnesota-based Delaware corporation.




Olympia
& York U.S.A.




On
November 21, 1996, we completed the acquisition of a 46% interest in World
Financial Properties, L.P., a New York-based Delaware limited
partnership.  World Financial Properties, L.P. owned 10 million square
feet of Class A office space in New York and Boston, including interests in
three of the four towers of the World Financial Center, One Liberty Plaza and
245 Park Avenue in Manhattan and 53 State Street in Boston.  In April
1997, we acquired from an affiliate of a Canadian chartered bank and Dragon
Holdings Limited a further 24% interest in World Financial Properties, L.P. for
approximately $145 million in cash and the issuance of 2.9 million warrants of
BPO.  Following the acquisition, we owned a 70% interest in World
Financial Properties, L.P., which changed its name to Brookfield Financial
Properties, L.P. (“Brookfield Financial Properties”).  In June 1998,
we increased our interest in Brookfield Financial Properties to 89% by
purchasing from an affiliate of Citicorp Real Estate Inc. a 19% equity
interest.  The cost of the acquisition was
$167 million.  As partial consideration for the acquisition, we
issued a $50 million 6% unsecured debenture convertible into 2,622,100 of our
common shares.  On May 30, 2001, we acquired a further 5.4% of its New
York and Boston assets owned through Brookfield Financial Properties from
Citibank for a total cost of $202 million, $60 million of cash and the
assumption of $142 million of long-term non-recourse property debt. This
transaction brought our interest in Brookfield Financial Properties to
approximately 95%. On December 31, 2002, we increased our interest in Brookfield
Financial Properties to 98.5% for cash consideration of $56
million.  During 2003, we acquired a further 0.9% of our New York and
Boston assets owned through Brookfield Financial Properties.  This
brought our interest in Brookfield Financial Properties to approximately
99.4%.




Royal
Trust




On
September 30, 1997, we purchased 14,582,252 common shares of BPO Properties
Ltd., a Canadian corporation and an owner of commercial properties primarily in
the Toronto area (“BPO Properties”, formerly Gentra Inc. and Royal Trustco
Limited), for an aggregate purchase price of $190 million.  The
purchase price was satisfied by a cash payment and approximately 4.6 million of
our common shares.  On completion of the transaction, we held
approximately 43% of the outstanding common shares of BPO
Properties.  On September 30, 1997, we also entered into an agreement
to purchase Series R preferred shares of BPO Properties.  On October
15, 1997, the Series R preferred shares were converted into common shares of BPO
Properties, increasing our ownership to 45%.




During
1999, BPO Properties acquired 5.8 million of its own common shares at a price
below net asset value for a total of $57 million, thereby increasing our equity
interest to 52%.  Subsequent to December 31, 1999, an additional 4
million common shares of BPO Properties were repurchased by BPO Properties for a
total cost of $40 million, thereby increasing our equity interest in BPO
Properties to 59% (47% on a voting basis).  During 2000, we continued
the consolidation of BPO Properties through both a normal course issuer bid and
tender offers for the shares that we did not already own.  Also in
September 2000, the effective ownership of BPO Properties was increased to 85%
through the issuance of 5.3 million common shares and the payment of $5 million
in cash.  We subsequently acquired an additional 2% of BPO Properties
through capital repurchases, bringing our equity ownership interest in BPO
Properties to 87% (47% of the voting securities and 100% of the non-voting
securities on a voting basis).




In April
2003, we acquired an additional 574,900 voting common shares of BPO Properties
in a private transaction at a cost of C$27.00 per BPO Properties share. The
transaction increased our equity interest in BPO Properties from 87% to
89%.  A wholly-owned subsidiary of BPO acquired these additional
shares by issuing C$15.5 million of retractable preferred
shares.  These shares were retractable until April 25, 2005 for either
cash or, at the option of the holder, 474,466 common shares of BPO and 94,893
common shares of Brookfield Homes Ltd. (“Brookfield Homes”), subject to certain
adjustments.  Thereafter, we extended an offer to acquire the balance
of outstanding common shares of BPO Properties which we did not
own.  In June 2003, we withdrew our proposal to enter into a “Going
Private Transaction” with BPO Properties due to the lack of support from
minority shareholders.  The retractable preferred shares were
subsequently purchased from the holder thereof for C$22,952,781.60.




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| Brookfield Properties Corporation | 2010 Annual Information Form
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Trizec
Western Canada




In June
2000, we acquired, through BPO Properties, a Western Canadian office portfolio
consisting of four office towers in Calgary and Vancouver.  These
properties, formerly part of the TrizecHahn portfolio, comprise a total of 3.5
million square feet of prime office, retail and parking space.  The
portfolio includes the flagship Bankers Hall East and West Towers and the Royal
Bank Building in Downtown Calgary as well as the Royal Centre in Downtown
Vancouver.




O&Y
Properties/O&Y REIT




In
October and November of 2005, through BPO Properties, we completed the
acquisition of O&Y Properties Corporation and the assets and liabilities of
O&Y Real Estate Investment Trust, adding approximately 11.6 million square
feet to BPO Properties’ office portfolio.  The C$2 billion O&Y
portfolio acquisition, one of the largest real estate deals in Canadian history,
comprised 24 office properties consisting of 27 buildings and one development
site in five Canadian cities.  The portfolio was acquired by a
consortium of institutional investors, led and managed by BPO Properties
investing directly through property level joint ventures (collectively,
“Canadian Office Fund”).  BPO Properties provided 25% of the equity,
approximately C$200 million, and serves as property and asset manager for the
Canadian Office Fund.




Trizec
Properties




In
October 2006, we acquired Trizec Properties, Inc. (“Trizec Properties”), a
publicly traded U.S. office real estate investment trust (“REIT”), and
Trizec Canada Inc., a Canadian company that held, among other assets, an
approximate 38% ownership interest in Trizec Properties (“Trizec Canada” and
collectively with Trizec Properties, “Trizec”), for consideration of
approximately $4.8 billion, which together with the existing indebtedness
of Trizec, gave the transaction a value of approximately
$8.9 billion.  The portfolio was acquired in a joint venture
involving a consortium of institutional investors, led and managed by us,
investing through direct and indirect investment vehicles (collectively, “U.S.
Office Fund”), and The Blackstone Group, a New York-based private equity
firm (“Blackstone”). The Trizec portfolio consisted of 74 high-quality
office properties totaling approximately 40 million square feet in
nine U.S. markets, including New York City, Washington, D.C. and
Los Angeles.




The U.S.
Office Fund invested approximately $1.4 billion into the
transaction.  Our equity investment in the U.S. Office Fund was
approximately $857 million.  Blackstone invested approximately
$507 million into the transaction.




The terms
of the joint venture agreement provide that we manage and operate the Trizec
portfolio, provided that Blackstone has been engaged pursuant to a
sub-management agreement to manage and operate certain properties in the Trizec
portfolio. We manage and operate properties amounting to approximately
24 million square feet located in Downtown Los Angeles,
Washington, D.C., Houston and New York City.  Under the
sub-management agreement, Blackstone manages and operates the balance of the
properties in the Trizec portfolio located in West Los Angeles, San Diego and
New York City.  Under the terms of the joint venture
agreement, commencing in 2011, Blackstone has the option to put its interest in
the venture in exchange for certain properties that are sub-managed by
Blackstone. If Blackstone does not exercise this option, in 2013, the U.S.
Office Fund has the option to call Blackstone’s interest in the venture in
exchange for the Blackstone sub-managed properties. On exercise of either the
put or call, the parties are subject to certain cash adjustment payments to
compensate for differences between the actual distributions and cashflows of the
respective sub-managed properties, as well as changes in fair values of such
properties from the date of acquisition to the call or the put closing date.
Such cash adjustments also provide for cross participation in cashflows and
changes in fair value of each party’s sub-managed properties.




Residential
and Housing




In 1985,
we entered the land development and home building businesses by acquiring a 50%
controlling interest in Coscan Development Corporation (“Coscan”) from Costain
U.K.  In 1987, we acquired a 45% interest in Carma Corporation from
several Canadian financial institutions which had acquired their shareholdings
in this company as a result of a major financial restructuring.  Over
the next eight years we increased our interest in Carma Corporation to
75%.




In 1995,
Coscan changed its name to Brookfield Homes.  On May 8, 1997, we
completed an amalgamation transaction with Brookfield Homes in which
shareholders of Brookfield Homes received one common share of BPO for each 1.5
common shares of Brookfield Homes held.  Prior to the amalgamation,
public shareholders owned approximately 4% of the total outstanding shares in
Brookfield Homes.




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| Brookfield Properties Corporation | 2010 Annual Information Form
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On May
13, 1999, we purchased 1 million common shares of Carma
Corporation.  This purchase increased our equity interest in Carma
Corporation to 35,395,499 common shares or approximately 82% of Carma
Corporation’s issued and outstanding common shares.  In September
2000, Carma Corporation was privatized through the issuance of 1.9 million of
our common shares and the payment of $1 million in cash.




On
October 29, 2002, our Board of Directors approved the special distribution of
our U.S. residential home building business, under the name Brookfield Homes
Corporation and that company commenced trading on the New York Stock Exchange
(“NYSE”) under the symbol “BHS” on January 7, 2003.  As a result we no
longer have an interest in Brookfield Homes Corporation.




In 2005,
Carma Corporation was restructured into two wholly-owned subsidiaries Carma
Developers LP, an Alberta limited partnership, which operates our Canadian
residential land development business, and Carma Inc., a Delaware corporation,
which operates our U.S. residential land development business.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 5




GENERAL
DEVELOPMENT OF THE BUSINESS




The
significant events affecting our business during the last three financial years
and to the date of this AIF are summarized below.  A number of these
events and conditions are discussed in greater detail under the heading
“Business of Brookfield Properties”.  We have not repeated the major
events referred to above under “Corporate Structure – Intercorporate
Relationships and History”.




Acquisitions
and Dispositions




In
February, 2007, we disposed of three of our properties that were classified as
held for sale: Atrium on Bay in Toronto and 2200 and 2204 Walkley in Ottawa.
Atrium on Bay was sold for C$250 million and the Walkley properties, held
through our Canadian Office Fund, were sold for C$25 million.




On May
16, 2007, we sold 18 King St., Toronto, for $10 million, resulting in a gain of
$4 million for our 25% interest in this 251,000 square foot
building.




On May
31, 2007, we purchased 1201 Louisiana, Total Plaza, Houston for $151.5
million.  The 35-story building comprising 892,000 square feet is
located one block east of the Allen Center and is directly linked to the Houston
central business district tunnel system.




On August
30, 2007, we sold 2 and 40 St. Clair Ave. West, Toronto, for C$90 million
resulting in a gain of approximately $7 million for our 25% interests in these
448,000 square foot buildings.




On
December 13, 2007, we sold Gulf Canada Square in Calgary for a gross sale price
of $97 million, resulting in a gain of approximately $27 million for our 25%
interest in this 1.1 million square foot building.




On
December 27, 2007, we acquired an additional 49% interest in 53 and 75 State
Street from RREEF for $477 million or $511 per square foot.  This
acquisition gave us sole ownership of the two towers, which in aggregate
encompass over 2.2 million square feet of Class A office space in Boston’s
financial district.




On April
1, 2008, we sold Acres House in Niagara Falls for a gross sale price of C$3.4
million, resulting in a gain of approximately nil for our 25% interest in this
building.




On July
24, 2008, we completed the disposition of a 50% interest in TD Canada Trust
Tower for gross proceeds of C$425 million and a net gain of $127 million. The
51-story, 1.1-million-square-foot tower is part of our 3.2 million square foot
Brookfield Place office and retail complex in Toronto's financial
district.




On August
11, 2009, we announced our participation in a $4 billion Investor Consortium
dedicated to investing in or acquiring underperforming real
estate.  We will have the option to fund opportunities in the office
sector on a global basis; all other opportunities will be funded by our parent
company, Brookfield Asset Management Inc. (“BAM”). In addition to us and BAM,
the participants in the Investor Consortium consist of a number of institutional
real estate investors which have each allocated between $300 million and $1
billion to the Investor Consortium.




On
December 30, 2009, we announced that we had entered into a joint venture
partnership with Edge Fund Advisors (“Edge”) on the 1625 Eye St., NW office
property in Washington, DC. In joining the venture, Edge, a Washington, DC-based
real estate investment advisor and asset management firm acting on behalf of
HSBC Alternative Investments Limited and an exclusive syndicate of HSBC Private
Banking Clients, assumed a 90% common membership interest in the building by
contributing $203.4 million, or $587 per leasable square foot. We maintained a
10% common membership interest as well as a preferred interest in the venture
and retain property management and leasing responsibilities at the
building.




On
December 30, 2009, we also announced that we had sold One Bethesda Center, a
179,000 square foot building in Bethesda, MD to JBG Associates, LLC for $71
million or $418 per square foot.




In the
fourth quarter of 2009, we established an operational platform in San
Francisco.  Through an agreement with BAM,   we began
operational and leasing oversight of 333 Bush Street, a property that the
Brookfield Real Estate Finance Fund took title to through a foreclosure
procedure.




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| Brookfield Properties Corporation | 2010 Annual Information Form
 6




Development




1225
Connecticut Avenue in Washington, D.C., a property that was acquired as part of
the Trizec portfolio, underwent a full redevelopment of its 269,000 square feet,
and construction was completed in the fourth quarter of 2008.  On
October 7, 2009, we announced that 1225 Connecticut Avenue had earned Leadership
in Energy and Environmental Design (“LEED”)   Platinum
certification, the industry’s highest rating for environmental sustainability.
It is the first redeveloped office building in the Eastern United States to
achieve LEED Platinum certification.




Waterview,
a development site acquired with the Trizec portfolio, was under construction
prior to its acquisition. On  May 30, 2007, we sold the office
component for $435 million, resulting in a gain of $58 million, and earning
incentive and termination fees of $16 million for our 25%
interest.  The remaining 300,000 square foot building was completed in
2007.




On June
25, 2007, we expanded the Herald Block development site in Calgary with the
acquisition of the Heagle building for C$5 million, adding 100,000 square feet
of additional density to the site, which now has a capacity of 1.2 million
rentable square feet. The acquisition of the building also links the site to
existing skybridge connections.




On
September 16, 2009, we officially opened Bay Adelaide Centre, the first
development built to achieve a LEED Gold Standard and the first major
development in Toronto’s financial district in 17 years. Standing 51 stories
tall, the 1.2 million square foot office tower adheres to strict building
efficiency guidelines, including optimization of energy, light and water, and
the use of local and recycled building materials.




On
September 23, 2009, we announced that we, along with our ownership partners,
will thoroughly renovate First Canadian Place, including a total recladding of
the building’s exterior with laminated glass spandrel panels replacing the
existing white marble. The project is seeking LEED Gold certification and is
expected to be complete by the end of 2011.




In the
fourth quarter of 2009, Republic Plaza, Denver, 53 State Street and 75 State
Street, Boston achieved LEED Gold certification through environmental
initiatives and upgrades including: exterior building site maintenance; water
and energy conservation; use of environmentally preferred products for cleaning
and alterations; waste stream management; and enhanced indoor environmental
quality.




Financings
and Refinancings




On
January 26, 2007 we refinanced One World Financial Center, New York, with a $310
million, non-recourse 10-year interest-only financing at a rate of 5.83%. This
financing repaid $300 million full-recourse floating rate
financing.




On July
26, 2007, BPO Properties closed on a C$420 million construction loan for Bay
Adelaide Centre.  The loan bears interest at Bankers Acceptance (“BA”)
plus 1.35% and has a three-year term with two one-year extension
options.




On August
13, 2007, we announced the completion of the refinancing of One Liberty Plaza in
Lower Manhattan with an $850 million, non-recourse 10-year loan.  The
financing was completed with Goldman Sachs at a fixed rate of 6.139%, repaying a
$397 million loan at a fixed rate of 6.75%.




In
October 2008, we renewed our $300 million corporate revolving credit facility
with BAM until 2010.




On
February 4, 2009, we extended our revolving credit facility through December
2010, with a six-month extension option through June 2011. The facility had an
initial closing for $388 million which was increased to $413 million in November
2009 and further increased to $438 million in January 2010.




On
December 1, 2009, we announced the completion of the refinancing of First
Canadian Place in Toronto with C$310 million (C$78 million at our ownership),
five-year first mortgage bonds.  The financing was completed at a
fixed rate of 5.367%. Proceeds from the financing were used to repay the
existing first mortgage bonds and will pay for costs associated with the
building’s rejuvenation program. With this, we completed our $1.3 billion of
financings due in 2009.




Equity




On
February 12, 2007, our Board of Directors approved a three-for-two stock
split.  The stock split was in the form of a subdivision of shares
with shareholders holding three BPO common shares, following the stock split,
for every two common shares previously held.  Fractional shares were
paid in cash at the then prevailing market price.  The stock split
occurred on April 27, 2007.




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| Brookfield Properties Corporation | 2010 Annual Information Form
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Also on
February 12, 2007, our Board of Directors approved an increase in the quarterly
dividend on our common shares by 11% to $0.14 per share on a post-split basis
providing for an effective annualized dividend rate of $0.56 per share
commencing with the dividend payable on June 30, 2007.




In May
2009, we launched a Dividend Reinvestment Plan (“DRIP”) which allows common
shareholders the opportunity to acquire additional common shares by reinvesting
their dividends in lieu of a cash payment.  The DRIP is available to
all common shareholders in Canada and the U.S.




On August
21, 2009, we completed an offering of 54,625,000 common shares to a syndicate of
underwriters at a purchase price of $9.50 per share. BAM concurrently purchased
54,625,000 common shares at a purchase price of $9.50 per share. The gross
proceeds raised by us from the combined share issuances was approximately $1.04
billion.




On
September 16, 2009, we announced that we had renewed our normal course issuer
bid and that we may, during the twelve month period commencing September 22,
2009 and ending September 21, 2010, purchase on the Toronto Stock Exchange (the
“TSX”) and the NYSE up to 25,032,918 common shares, representing approximately
5% of our issued and outstanding common shares.




On
September 24, 2009, we completed an offering of 11,500,000 preference shares,
Series L to a syndicate of underwriters at a purchase price of C$25.00 per
share. The gross proceeds raised by us from the share issuance was C$287.5
million.




On
December 8, 2009, we announced that we had commenced a normal course issuer bid
and that we may, during the twelve month period commencing December 11, 2009 and
ending December 10, 2010, purchase on the TSX up to 400,000 Class AAA preference
shares, Series F, 220,000 Class AAA preference shares, Series G, 400,000 Class
AAA preference shares, Series H, 400,000 Class AAA preference shares, Series I,
400,000 Class AAA preference shares, Series J and 300,000 Class AAA preference
shares, Series K, each representing approximately 5% of the issued and
outstanding Class AAA preference shares of the applicable series.




In
December 2009, we filed a short form base shelf prospectus with the securities
regulatory authorities in all of the provinces of Canada and a registration
statement on Form F-10 with the United States Securities and Exchange
Commission.  This shelf prospectus allows us to issue up to $1 billion
of Class AAA preference shares, common shares and unsecured debt
securities.




On
January 20, 2010, we  completed an offering of 11,000,000 preference
shares, Series N to a syndicate of underwriters at a purchase price of C$25.00
per share. The gross proceeds raised by us from the share issuances was C$275
million.




Other




On
October 9, 2009, we announced we had been granted exemptive relief to prepare
our financial statements in accordance with IFRS for financial periods beginning
on or after January 1, 2010, ahead of the mandatory conversion date for Canadian
public companies. We intend to adopt IFRS commencing with our interim financial
statements for the three months ending March 31, 2010.




On
February 26, 2010, we announced a proposal to create Canada's pre-eminent office
real estate investment trust (REIT). Upon conversion, the new REIT, to be named
Brookfield Office Properties Canada, will acquire BPO Properties’ directly owned
office assets in Toronto, Calgary and Vancouver and will also acquire Brookfield
Properties' interest in Brookfield Place.  The transaction will be
effected by way of a plan of arrangement under the Canada Business Corporations
Act. The transaction requires shareholder approval, as well as approval
by the Ontario Superior Court of Justice and is conditional upon receipt of all
necessary regulatory, TSX and third party consents and approvals.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 8




BUSINESS
OF BROOKFIELD PROPERTIES




Overview




BPO is a
publicly-traded North American commercial real estate company listed on the New
York and Toronto stock exchanges under the symbol “BPO”. We operate in two
principal business segments, the first being the ownership, development and
management of premier commercial office properties in select cities in North
America, and the second being the development of residential land. Since 2005,
we have established and fully invested two core office funds for the purpose of
enhancing our position as a leading real estate asset manager: the U.S. Office
Fund (a single-purpose fund established to acquire the Trizec portfolio) and the
Canadian Office Fund (a single-purpose fund established to acquire the O&Y
portfolio).




Commercial
Property Operations




Owing to
our strategy of owning, proactively managing and developing premier properties
in high-growth, and in many instances supply-constrained, markets with high
barriers to entry, along with our focus on executing long-term leases with
strong credit rated tenants, we have created one of North America’s most
distinguished portfolios of office properties. Our commercial property portfolio
consists of interests in 110 properties totaling 75 million square feet,
including 9 million square feet of parking.  Our properties are listed
in Appendix B
hereto.  Our development/redevelopment portfolio comprises interests
in 13 sites totaling 15 million square feet. Our primary markets are the
financial, energy and government center cities of New York, Boston, Washington,
D.C., Houston, Los Angeles, Toronto, Calgary and Ottawa. We intend to continue
our strategy of maintaining a meaningful presence in a select number of North
American cities with attractive tenant bases.




We remain
focused on the following strategic priorities:




·
            Realizing
      value from our properties through proactive leasing and select
      redevelopment initiatives;




·
            Prudent
      capital management including the refinancing of mature properties;
      and




·
            Monetizing
      development assets as the economy rebounds and supply constraints create
      opportunities.




Our
commercial property portfolio, segregated by market, is
as follows:




Region
            Number
      of Properties
            Total
      Area
              (000’s
      Sq.Ft.)New York,
      New York
            13
            20,563Boston,
      Massachusetts
            2
            2,266Washington, D.C.
            29
            6,921Toronto,
      Ontario
            11
            9,137Calgary,
      Alberta
            9
            6,912Ottawa,
      Ontario
            6
            2,777Denver,
      Colorado
            1
            1,830Minneapolis,
      Minnesota
            4
            3,051Los
      Angeles, California
            22
            10,835Houston,
      Texas
            9
            9,118Edmonton,
      Alberta
            2
            712Vancouver,
      British Columbia
            1
            853Other
            1
            73Total
            110
            75,048




Business
Strategy




Long-Term Lease
Profile Limits Market Risk. Our strategy is to sign long-term leases in
order to mitigate risk and reduce our overall retenanting costs. We typically
commence discussions with tenants regarding their space requirements well in
advance of the contractual expiration, and although each market is different,
the majority of our leases, when signed, extend between 10- and 20-year terms.
As a result of this strategy, less than 9% of our leases, on average, mature
annually over the next five years and excluding Bank of America/Merrill Lynch,
our largest tenant, approximately 7% of our leases, on average, mature annually
over the next five years.




Diversified, High
Credit Quality Tenants.  An important characteristic of our
portfolio is the strong credit quality of our tenants. We direct special
attention to credit quality, particularly in the current economic environment,
in order to ensure the long-term sustainability of rental revenues through
economic cycles. The following list shows major tenants with over one million
square feet of space in the portfolio by leased area and their respective lease
commitments:




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 9




Year
      of
            000's
            %
      ofTenant
            Location
            Expiry(1)
            Sq.
      Ft.(2)
            Sq.
      Ft.(2)Bank
      of America/Merrill Lynch(3)
            New
      York/Toronto/Denver/Los Angeles
            2013
            4,923
            7.6%Government
      and Government Agencies(4)
            All
      Markets
            Various
            3,387
            5.2%Chevron
            Houston
            2017
            1,742
            2.7%Wells
      Fargo/Wachovia
            New
      York
            2015
            1,439
            2.2%CIBC
            New
      York/Toronto/Calgary
            2032
            1,437
            2.2%RBC
      Financial Group
            Five
      Markets
            2020
            1,195
            1.8%Bank
      of Montreal
            Toronto/Calgary
            2018
            1,131
            1.7%Suncor
      Energy
            Calgary
            2028
            1,015
            1.5%


(1)
            Weighted
      average based on square feet


(2)
            Prior
      to considering partnership interests in partially-owned
      properties


(3)
            Bank
      of America/Merrill Lynch leases 4.6 million square feet in the World
      Financial Center ("WFC"), of which they occupy 2.8 million square feet
      with the balance being leased to various subtenants ranging in size up to
      500,000 square feet. Of this 2.8 million square feet, 1.9 million is in 4
      WFC, in which Bank of America/Merrill Lynch has a 49% interest, and 0.9
      million square feet is in 2 WFC, in which Bank of America/Merrill Lynch
      has an effective 25% interest through zero-coupon
  notes


(4)
            Represents
      various U.S. and Canadian federal governments and
  agencies




Proactive Leasing
Strategy.Our proactive leasing strategy produced total 2009
leasing of 4.6million square feet for
our managed portfolio. Our vacancy rates are significantly below the market
average in almost all of our primary markets.  Our managed portfolio
occupancy rate, at December 31, 2009, was 95.0%.  Increasing occupancy
and reducing rollover exposure ensures continued stable cashflow and low levels
of capital expenditures and leasing costs.




Investment
Strategy




Acquire high
quality properties in our target markets.  Our strategy is to
opportunistically acquire assets in high growth markets, namely markets where
financial services, government and energy sectors drive the market, and assets
which exhibit an opportunity to improve or preserve returns through
repositioning (through a combination of capital improvements and for a shift in
marketing strategy), changes in management focus and re-leasing as existing
leases terminate.




Expand asset
management platform.We have historically explored
property-level joint venture opportunities with strategic institutional
partners. Although we plan to continue with this endeavor, we also consider
opportunities to pursue the acquisition of individual assets and portfolios
through joint venture fund vehicles. In 2005 we formed our Canadian Office Fund
to acquire the O&Y portfolio and in 2006 we formed our U.S. Office Fund to
consummate the acquisition of the Trizec portfolio. Of our 110 commercial office
properties, 25 are wholly owned, 14 are held in property-level joint ventures or
co-tenancies and 71 are held in our funds.




Our
Canadian Office Fund consists of a consortium of institutional investors, led
and managed by us. Affiliates of the consortium members own direct interests in
property-level joint ventures and have entered into several agreements relating
to property management, fees, transfer rights and other material issues
associated with the operation of the properties. Our U.S. Office Fund consists
of a consortium of institutional investors, which we lead and manage, investing
through direct and indirect investment vehicles who have also entered into
several agreements relating to property management, fees, transfer rights and
other material issues associated with the operation of the
properties.




We
believe that investing our liquidity with these partners in fund formats enables
us to enhance returns. The funds and associated asset management fees represent
an important area of growth as we expand our assets under management. Purchasing
properties or portfolios of properties in a fund format allows us to earn the
following categories of fees:




·
            Asset
      Management
            Stable
      base fee for providing regular, ongoing services.·
            Transaction
            Development,
      redevelopment and leasing activities conducted on behalf of these
      funds.·
            Performance
            Earned
      when certain predetermined benchmarks are exceeded. Performance fees which
      can add considerably to fee revenue, typically arise later in a fund’s
      life cycle and are therefore not fully reflected in current
      results.





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 10




Commercial
Development




We hold
interests in 15 million square feet of high-quality, centrally-located
development and redevelopment sites at various stages of planning and
construction. We will seek to monetize these sites through development only when
our risk-adjusted return hurdles are met and when preleasing targets with one or
more lead tenants have been achieved. We currently have one project under
development and one project under redevelopment. The following table summarizes
our commercial development projects at December 31, 2009:


(Square
      feet in 000’s)
                          Region
                          Description
                          Number
                            of
                            Sites
                          Owned
                            Interest
                            %(1)
                          Density
                            (000’s
      Sq.Ft.)DirectManhattan
      West
                          New
      York
                          Between
      31st and 33rd Streets across from the Farley Post Office
                          1
                          100%
                          5,400Bay
      Adelaide Centre
                          Toronto
                          Bay
      and Adelaide Streets
                          1
                          100%
                          2,600Brookfield
      Place III
                          Toronto
                          Third
      phase of Brookfield Place project
                          1
                          54%
                          800Bankers
      West Parkade
                          Calgary
                          West
      Parkade adjacent to Bankers Hall
                          1
                          50%
                          250Herald
      Site
                          Calgary
                          One
      block from our existing Calgary assets
                          1
                          100%
                          1,2001501
      Tremont Place
                          Denver
                          One
      block from Republic Plaza
                          1
                          100%
                          733Block
      173
                          Denver
                          One
      block from Republic Plaza
                          1
                          100%
                          6007
                          
                          11,583U.S.
      Office FundReston
      Crescent
                          Washington
                          36
      acre landscaped campus in Reston, Virginia
                          1
                          100%
                          7241500
      Smith Street
                          Houston
                          Adjacent
      to 1400 Smith Street
                          1
                          100%
                          500Allen
      Center Clay Street
                          Houston
                          Located
      in the heart of the Allen Center / Cullen Center complex
                          1
                          100%
                          600Five
      Allen Center
                          Houston
                          Adjacent
      to the Allen Center
                          1
                          100%
                          1,1004
                          
                          2,924Canadian
      Office Fund300
      Queen Street
                          Ottawa
                          Third
      phase of Place de Ville project
                          1
                          25%
                          5771
                          
                          57712
                          
                          15,084Redevelopment1225
      Connecticut
                          Washington
                          Downtown
      Washington, D.C.
                          1
                          100%
                          269Total
      development and redevelopment
                          13
                          
                          15,353


(1)
            Represents
      our consolidated interest before non-controlling
  interests





Residential
Development




Through
our residential development business segment, we develop residential land and
conduct homebuilding operations. Operations are currently focused in five
markets: Alberta and Ontario in Canada, and Colorado, Texas and Missouri in the
U.S. These business units primarily entitle and develop land in master-planned
communities and then sell these lots to other homebuilders. However, in Alberta
and Ontario we also build and sell homes.




We intend
to continue to grow this business over time by selectively acquiring land that
either enhances our existing inventory or provides the residential development
groups with attractive projects that are consistent with our overall strategy
and management expertise.




We
classify our residential development business into three categories: land held
for development; land under development; and housing inventory. Costs
attributable to land held for development include costs of acquiring land as
well as general infrastructure costs to service the land within a community.
These costs are not directly related to saleable lots. Once development of a
phase begins, the associated costs with that phase are transferred from land
held for development to land under development, which includes all underlying
costs that are attributable to the phase of saleable lots, including costs of
the underlying land, roads, school sites and parks. Included in housing
inventory is associated land as well as construction costs.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 11




The
following table summarizes our residential land development at December 31,
2009:




Under
      Development
            Housing
      Inventory
            Held
      for Development($
      in Millions)
            Number
      of Lots/Acres
            Book
              Value
            Number
      of
              Units
            Book
              Value
            Number
      of
              Acres
            Book
              ValueSingle
      Family (Lots)Alberta
            1,827
            $
            247
            165
            $
            21
            6,385
            $
            477Ontario
            ―
            
            ―
            341
            
            48
            1,488
            
            57Colorado
            996
            
            53
            ―
            
            ―
            2,299
            
            153Texas
            80
            
            4
            ―
            
            ―
            3,946
            
            102Missouri
            93
            
            3
            ―
            
            ―
            205
            
            8Total
      Single Family (Lots)
            2,966
            $
            307
            506
            $
            69
            14,323
            $
            797Total
      Single Family (Acre Equivalent)(1)
            546Multi-Family
      and Commercial (Acres)Alberta
            136
            $
            52
            265
            $
            32
            ―
            $
            ―Colorado
            10
            
            2
            ―
            
            ―
            ―
            
            ―Texas
            1
            
            ―
            ―
            
            ―
            ―
            
            ―Total
      Multi-Family and Commercial (Acres)
            147
            $
            54
            265
            $
            32
            ―
            $
            ―Total
      Book Value
            
            $
            361
            
            $
            101
            
            $
            797


(1)
            Represents
      lots converted to acres based on a conversion factor of four to seven lots
      per acre depending on region




Prudent
and Flexible Capital Plan




Our
strong balance sheet allows us to simultaneously pursue numerous growth
initiatives including development and acquisitions.




We
monitor both the amount of our leverage and the mix of our fixed/floating-rate
debt to provide a more reliable stream of earnings.  We regularly
review various credit ratios to monitor our leverage.  In order to
mitigate the risk of rising interest rates, we finance our commercial properties
through a combination of fixed and variable rate debt.  Our optimum
financing goal is to place long-term fixed rate non-recourse debt on each of our
commercial properties.  However, when an asset is being repositioned
or released we may temporally use a variety of short term variable rate
financing facilities, including loans from BAM and its affiliates, bridge
financing from financial institutions and recourse debt.  In addition,
from time to time, we may enter into interest rate derivative contracts in order
to limit our exposure to increasing interest rates.




Important
sources of liquidity for us are two unsecured revolving credit facilities: (i) a
$413 million unsecured facility with a syndicate of banks and (ii) $300 million
unsecured facility with BAM.  The $413 million facility bears interest
at BA/LIBOR plus a spread of 3.75% to 4.0% based on our corporate debt rating
and the $300 million facility bears interest at BA/LIBOR plus a spread of
3.75%.  The $413 million facility includes numerous financial
covenants that limit our ability to borrow under the facility.  At
December 31, 2009, the balance drawn on these facilities was nil and nil,
respectively.  Additionally, we have a term loan facility, which was
refinanced during the third quarter of 2009 at a rate of LIBOR + 375 basis
points (with a LIBOR floor of 2%). The outstanding balance at December 31, 2009
on this facility was $100 million and matures on September 30,
2010.




Depending
on market conditions, we opportunistically access the public equity markets
through the issuance of common or preference shares.  To the extent
that we believe it is necessary and efficient, we may also raise capital through
a variety of other means, including, but not limited to, selling assets,
entering into joint ventures or partnerships with equity providers, or a
combination of these and other methods.




Select
financial ratios are set out in the following table:




Three-Year
            Annual
      ResultsObjective
            Average
            2009
            2008
            2007Debt-to-total-market-capitalization
            58%
            57%
            69%
            47%Non-recourse
      debt as a percentage of total(1)
            95%
            96%
            94%
            94%Interest
      expense coverage
            2.1x
            2.3x
            2.1x
            2.0x


(1)
            Non-recourse
      to BPO




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 12




The
following describes our commercial property debt at December 31,
2009:


Dec. 31, 2009(1,2)($
      in millions)
                                                          Location
                                                          Rate
      %
                                                          
                                                          Maturity
      Date
                                                          
                                                          
                                                          
                                                          Proportional(3)
                                                          
                                                          Consolidated
                                                          
                                                          Mortgage
      DetailsDirect77 K
      Street
                                                          Washington,
      D.C.
                                                          4.43
                                                          
                                                          April
                                                          
                                                          2010
                                                          $
                                                          34
                                                          $
                                                          34
                                                          
                                                          Non-recourse,
      fixed rateBankers
      Court
                                                          Calgary
                                                          1.90
                                                          
                                                          October
                                                          
                                                          2010
                                                          
                                                          42
                                                          
                                                          42
                                                          
                                                          Non-recourse,
      floating rate245
      Park Avenue
                                                          New
      York
                                                          6.65
                                                          
                                                          February
                                                          
                                                          2011
                                                          
                                                          221
                                                          
                                                          221
                                                          
                                                          Non-recourse,
      fixed rateQueen’s
      Quay Terminal
                                                          Toronto
                                                          7.26
                                                          
                                                          March
                                                          
                                                          2011
                                                          
                                                          31
                                                          
                                                          31
                                                          
                                                          Non-recourse,
      fixed rateBay Adelaide
      Centre(4)(6)
                                                          Toronto
                                                          1.75
                                                          
                                                          July
                                                          
                                                          2011
                                                          
                                                          367
                                                          
                                                          367
                                                          
                                                          Non-recourse,
      floating rateFifth
      Avenue Place
                                                          Calgary
                                                          7.59
                                                          
                                                          August
                                                          
                                                          2011
                                                          
                                                          66
                                                          
                                                          66
                                                          
                                                          Non-recourse,
      fixed rate1201
      Louisiana Street
                                                          Houston
                                                          6.73
                                                          
                                                          September
                                                          
                                                          2011
                                                          
                                                          100
                                                          
                                                          100
                                                          
                                                          Non-recourse,
      fixed ratePotomac
      Tower
                                                          Washington,
      D.C.
                                                          4.72
                                                          
                                                          November
                                                          
                                                          2011
                                                          
                                                          75
                                                          
                                                          75
                                                          
                                                          Non-recourse,
      fixed rateWest 31st
      Street(4)
                                                          New
      York
                                                          6.00
                                                          
                                                          January
                                                          
                                                          2012
                                                          
                                                          105
                                                          
                                                          105
                                                          
                                                          Partial-recourse,
      floating rate300
      Madison Avenue
                                                          New
      York
                                                          0.53
                                                          
                                                          April
                                                          
                                                          2012
                                                          
                                                          42
                                                          
                                                          42
                                                          
                                                          Non-recourse,
      floating rateExchange
      Tower
                                                          Toronto
                                                          6.83
                                                          
                                                          April
                                                          
                                                          2012
                                                          
                                                          56
                                                          
                                                          56
                                                          
                                                          Non-recourse,
      fixed rateRBC Plaza(5)
                                                          Minneapolis
                                                          5.50
                                                          
                                                          April
                                                          
                                                          2012
                                                          
                                                          68
                                                          
                                                          68
                                                          
                                                          Non-recourse,
      floating rateRoyal
      Centre
                                                          Vancouver
                                                          4.96
                                                          
                                                          May
                                                          
                                                          2012
                                                          
                                                          112
                                                          
                                                          112
                                                          
                                                          Non-recourse,
      fixed rateHSBC
      Building
                                                          Toronto
                                                          8.19
                                                          
                                                          October
                                                          
                                                          2012
                                                          
                                                          21
                                                          
                                                          21
                                                          
                                                          Non-recourse,
      fixed rate105
      Adelaide
                                                          Toronto
                                                          5.32
                                                          
                                                          February
                                                          
                                                          2013
                                                          
                                                          21
                                                          
                                                          21
                                                          
                                                          Non-recourse,
      fixed rateBay
      Wellington Tower
                                                          Toronto
                                                          6.49
                                                          
                                                          April
                                                          
                                                          2013
                                                          
                                                          313
                                                          
                                                          313
                                                          
                                                          Non-recourse,
      fixed rateHudson’s Bay
      Centre(7)
                                                          Toronto
                                                          5.20
                                                          
                                                          May
                                                          
                                                          2013
                                                          
                                                          104
                                                          
                                                          104
                                                          
                                                          Non-recourse,
      fixed rate75
      State Street
                                                          Boston
                                                          5.50
                                                          
                                                          June
                                                          
                                                          2013
                                                          
                                                          297
                                                          
                                                          297
                                                          
                                                          Partial-recourse,
      floating rateTwo
      World Financial Center
                                                          New
      York
                                                          6.91
                                                          
                                                          September
                                                          
                                                          2013
                                                          
                                                          317
                                                          
                                                          317
                                                          
                                                          Non-recourse,
      fixed rateFour
      World Financial Center
                                                          New
      York
                                                          6.95
                                                          
                                                          September
                                                          
                                                          2013
                                                          
                                                          188
                                                          
                                                          188
                                                          
                                                          Non-recourse,
      fixed rate601
      South 12th Street
                                                          Washington,
      D.C.
                                                          5.42
                                                          
                                                          October
                                                          
                                                          2013
                                                          
                                                          52
                                                          
                                                          52
                                                          
                                                          Non-recourse,
      fixed rate701
      South 12th Street
                                                          Washington,
      D.C.
                                                          5.42
                                                          
                                                          October
                                                          
                                                          2013
                                                          
                                                          43
                                                          
                                                          43
                                                          
                                                          Non-recourse,
      fixed rateBankers
      Hall
                                                          Calgary
                                                          7.20
                                                          
                                                          November
                                                          
                                                          2013
                                                          
                                                          159
                                                          
                                                          159
                                                          
                                                          Non-recourse,
      fixed rateRepublic
      Plaza
                                                          Denver
                                                          5.14
                                                          
                                                          April
                                                          
                                                          2014
                                                          
                                                          159
                                                          
                                                          159
                                                          
                                                          Non-recourse,
      fixed rateSuncor
      Energy Centre
                                                          Calgary
                                                          6.38
                                                          
                                                          June
                                                          
                                                          2014
                                                          
                                                          206
                                                          
                                                          206
                                                          
                                                          Partial
      recourse, fixed rateTwo
      World Financial Center
                                                          New
      York
                                                          10.80
                                                          
                                                          September
                                                          
                                                          2014
                                                          
                                                          124
                                                          
                                                          124
                                                          
                                                          Non-recourse,
      floating rate53
      State Street
                                                          Boston
                                                          5.96
                                                          
                                                          August
                                                          
                                                          2016
                                                          
                                                          280
                                                          
                                                          280
                                                          
                                                          Non-recourse,
      fixed rateOne
      World Financial Center
                                                          New
      York
                                                          5.83
                                                          
                                                          February
                                                          
                                                          2017
                                                          
                                                          309
                                                          
                                                          309
                                                          
                                                          Non-recourse,
      fixed rateOne
      Liberty Plaza
                                                          New
      York
                                                          6.14
                                                          
                                                          September
                                                          
                                                          2017
                                                          
                                                          835
                                                          
                                                          835
                                                          
                                                          Non-recourse,
      fixed rateWest 33rd
      Street(4)
                                                          New
      York
                                                          5.90
                                                          
                                                          April
                                                          
                                                          2018
                                                          
                                                          122
                                                          
                                                          122
                                                          
                                                          Non-recourse,
      fixed rate22
      Front Street
                                                          Toronto
                                                          6.24
                                                          
                                                          October
                                                          
                                                          2020
                                                          
                                                          18
                                                          
                                                          18
                                                          
                                                          Non-recourse,
      fixed rate33 South Sixth
      Street(5)
                                                          Minneapolis
                                                          8.72
                                                          
                                                          May
                                                          
                                                          2028
                                                          
                                                          88
                                                          
                                                          88
                                                          
                                                          Non-recourse,
      fixed rate701
      9th Street
                                                          Washington,
      D.C.
                                                          6.73
                                                          
                                                          December
                                                          
                                                          2028
                                                          
                                                          152
                                                          
                                                          152
                                                          
                                                          Non-recourse,
      fixed rate300
      Madison Avenue
                                                          New
      York
                                                          7.26
                                                          
                                                          April
                                                          
                                                          2032
                                                          
                                                          400
                                                          
                                                          400
                                                          
                                                          Non-recourse,
      fixed rateTotal
      Direct
                                                          
                                                          6.02
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          5,527
                                                          $
                                                          5,527U.S.
      Office FundWaterview
                                                          Washington,
      D.C.
                                                          2.25
                                                          
                                                          August
                                                          
                                                          2010
                                                          $
                                                          3
                                                          $
                                                          5
                                                          
                                                          Non-recourse,
      floating rateTwo
      Ballston Plaza
                                                          Washington,
      D.C.
                                                          6.90
                                                          
                                                          April
                                                          
                                                          2011
                                                          
                                                          15
                                                          
                                                          24
                                                          
                                                          Non-recourse,
      fixed rateBethesda
      Crescent
                                                          Washington,
      D.C.
                                                          6.90
                                                          
                                                          April
                                                          
                                                          2011
                                                          
                                                          19
                                                          
                                                          31
                                                          
                                                          Non-recourse,
      fixed rateSilver Spring Metro
      Plaza(8)
                                                          Washington,
      D.C.
                                                          6.00
                                                          
                                                          September
                                                          
                                                          2011
                                                          
                                                          58
                                                          
                                                          94
                                                          
                                                          Non-recourse,
      floating rate2401 Pennsylvania
      Avenue(8)
                                                          Washington,
      D.C.
                                                          6.00
                                                          
                                                          September
                                                          
                                                          2011
                                                          
                                                          10
                                                          
                                                          17
                                                          
                                                          Non-recourse,
      floating rate1250 Connecticut(8)
                                                          Washington,
      D.C.
                                                          6.00
                                                          
                                                          September
                                                          
                                                          2011
                                                          
                                                          28
                                                          
                                                          45
                                                          
                                                          Non-recourse,
      floating rate1460
      Broadway
                                                          New
      York
                                                          5.11
                                                          
                                                          November
                                                          
                                                          2012
                                                          
                                                          ―
                                                          
                                                          12
                                                          
                                                          Non-recourse,
      fixed rate5670
      Wilshire
                                                          Los
      Angeles
                                                          2.30
                                                          
                                                          May
                                                          
                                                          2013
                                                          
                                                          ―
                                                          
                                                          57
                                                          
                                                          Non-recourse,
      floating rate1400
      Smith Street
                                                          Houston
                                                          5.77
                                                          
                                                          October
                                                          
                                                          2013
                                                          
                                                          149
                                                          
                                                          240
                                                          
                                                          Non-recourse,
      fixed rateErnst
      & Young Plaza
                                                          Los
      Angeles
                                                          5.07
                                                          
                                                          February
                                                          
                                                          2014
                                                          
                                                          66
                                                          
                                                          107
                                                          
                                                          Non-recourse,
      fixed rate2000
      L Street
                                                          Washington,
      D.C.
                                                          4.24
                                                          
                                                          April
                                                          
                                                          2014
                                                          
                                                          34
                                                          
                                                          55
                                                          
                                                          Non-recourse,
      floating rateGrace
      Building
                                                          New
      York
                                                          5.54
                                                          
                                                          July
                                                          
                                                          2014
                                                          
                                                          116
                                                          
                                                          187
                                                          
                                                          Non-recourse,
      fixed rate1411
      Broadway
                                                          New
      York
                                                          5.50
                                                          
                                                          July
                                                          
                                                          2014
                                                          
                                                          ―
                                                          
                                                          107
                                                          
                                                          Non-recourse,
      fixed rateBank
      of America Plaza
                                                          Los
      Angeles
                                                          5.31
                                                          
                                                          September
                                                          
                                                          2014
                                                          
                                                          142
                                                          
                                                          229
                                                          
                                                          Non-recourse,
      fixed rate2001
      M Street
                                                          Washington,
      D.C.
                                                          5.25
                                                          
                                                          December
                                                          
                                                          2014
                                                          
                                                          28
                                                          
                                                          45
                                                          
                                                          Non-recourse,
      fixed rateVictor
      Building
                                                          Washington,
      D.C.
                                                          5.39
                                                          
                                                          February
                                                          
                                                          2016
                                                          
                                                          30
                                                          
                                                          49
                                                          
                                                          Non-recourse,
      fixed rateOne
      New York Plaza
                                                          New
      York
                                                          5.50
                                                          
                                                          March
                                                          
                                                          2016
                                                          
                                                          242
                                                          
                                                          390
                                                          
                                                          Non-recourse,
      fixed rateMarina
      Towers
                                                          Los
      Angeles
                                                          5.84
                                                          
                                                          April
                                                          
                                                          2016
                                                          
                                                          12
                                                          
                                                          20
                                                          
                                                          Non-recourse,
      fixed rateU.S.
      Fund Pool debt
                                                          —
                                                          6.84
                                                          
                                                          May
                                                          
                                                          2011
                                                          
                                                          142
                                                          
                                                          303
                                                          
                                                          Non-recourse,
      fixed rateU.S. Fund corporate
      debt(9)
                                                          —
                                                          2.73
                                                          
                                                          October
                                                          
                                                          2011
                                                          
                                                          1,292
                                                          
                                                          3,067
                                                          
                                                          Non-recourse,
      fixed/floating ateU.S.
      Fund Pool debt
                                                          —
                                                          0.98
                                                          
                                                          October
                                                          
                                                          2011
                                                          
                                                          279
                                                          
                                                          593
                                                          
                                                          Non-recourse,
      floating rateTotal
      U.S. Office Fund
                                                          
                                                          3.77
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          2,668
                                                          $
                                                          5,677Canadian
      Office FundPlace
      de Ville I
                                                          Ottawa
                                                          7.81
                                                          
                                                          February
                                                          
                                                          2010
                                                          $
                                                          5
                                                          $
                                                          5
                                                          
                                                          Non-recourse,
      fixed rate151
      Yonge Street
                                                          Toronto
                                                          6.01
                                                          
                                                          June
                                                          
                                                          2012
                                                          
                                                          10
                                                          
                                                          10
                                                          
                                                          Non-recourse,
      fixed rateJean
      Edmonds Tower
                                                          Ottawa
                                                          5.55
                                                          
                                                          January
                                                          
                                                          2014
                                                          
                                                          1
                                                          
                                                          1
                                                          
                                                          Non-recourse,
      fixed rateFirst
      Canadian Place
                                                          Toronto
                                                          5.37
                                                          
                                                          December
                                                          
                                                          2014
                                                          
                                                          73
                                                          
                                                          73
                                                          
                                                          Non-recourse,
      fixed rate2
      Queen Street East
                                                          Toronto
                                                          5.64
                                                          
                                                          December
                                                          
                                                          2017
                                                          
                                                          27
                                                          
                                                          27
                                                          
                                                          Non-recourse,
      fixed rate
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 13


Dec. 31, 2009(1,2)($
      in millions)
                                                                                            Location
                                                                                            Rate
      %
                                                                                            
                                                                                            Maturity
      Date
                                                                                            
                                                                                            
                                                                                            
                                                                                            Proportional(3)
                                                                                            
                                                                                            Consolidated
                                                                                            
                                                                                            Mortgage
      DetailsAltius
      Centre
                                                                                            Calgary
                                                                                            5.64
                                                                                            
                                                                                            December
                                                                                            
                                                                                            2017
                                                                                            
                                                                                            19
                                                                                            
                                                                                            19
                                                                                            
                                                                                            Non-recourse,
      fixed rateCanadian
      Western Bank
                                                                                            Edmonton
                                                                                            5.64
                                                                                            
                                                                                            December
                                                                                            
                                                                                            2017
                                                                                            
                                                                                            14
                                                                                            
                                                                                            14
                                                                                            
                                                                                            Non-recourse,
      fixed rateEnbridge
      Tower
                                                                                            Edmonton
                                                                                            6.50
                                                                                            
                                                                                            July
                                                                                            
                                                                                            2019
                                                                                            
                                                                                            6
                                                                                            
                                                                                            6
                                                                                            
                                                                                            Non-recourse,
      fixed rateJean
      Edmonds Tower
                                                                                            Ottawa
                                                                                            6.79
                                                                                            
                                                                                            January
                                                                                            
                                                                                            2024
                                                                                            
                                                                                            16
                                                                                            
                                                                                            16
                                                                                            
                                                                                            Non-recourse,
      fixed rateTotal
      Canadian Office Fund
                                                                                            
                                                                                            5.75
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            171
                                                                                            $
                                                                                            171CorporateTerm
      Facility
                                                                                            ―
                                                                                            5.75
                                                                                            
                                                                                            September
                                                                                            
                                                                                            2010
                                                                                            $
                                                                                            100
                                                                                            $
                                                                                            100
                                                                                            
                                                                                            Recourse,
      floating rateCorporate
      Revolver(4)
                                                                                            ―
                                                                                            4.15
                                                                                            
                                                                                            December
                                                                                            
                                                                                            2010
                                                                                            
                                                                                            ―
                                                                                            
                                                                                            ―
                                                                                            
                                                                                            Recourse,
      floating rateCorporate
      Revolver
                                                                                            ―
                                                                                            3.98
                                                                                            
                                                                                            June
                                                                                            
                                                                                            2011
                                                                                            
                                                                                            ―
                                                                                            
                                                                                            ―
                                                                                            
                                                                                            Recourse,
      floating rateTotal
      Corporate
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            100
                                                                                            $
                                                                                            100Total
      Commercial Property Debt
                                                                                            
                                                                                            4.81
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            $
                                                                                            8,466
                                                                                            $
                                                                                            11,475


(1)
            Represents
      the company’s consolidated interest before non-controlling
      interests


(2)
            Net
      of $51 million of transaction costs


(3)
            Reflects
      BPO’s effective 47% interest in the U.S. Office
  Fund


(4)
            Development
      debt


(5)
            Commercial
      property debt of $156 million relates to discontinued
      operations


(6)
            Has
      a one-year extension options available at maturity. The criteria to extend
      the first option to 2011 have been met as of December 31, 2009.


(7)
            Has
      a two-year extension option to May 2015 which is available to the company
      provided certain debt service and loan-to-value thresholds are
      met


(8)
            Property
      debt is cross-collateralized


(9)
            As
      at December 31, 2009 $1 billion of this debt has been swapped to fixed
      rate at an average rate of 1.38%




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 14




Primary
Markets and Properties




The
following is a brief overview of the commercial property markets in which BPO
operates as of the date of this AIF and includes discussion of management’s
expectations with respect to certain markets which, by its nature, contains
certain forward-looking statements.  Forward-looking statements
require us to make certain assumptions and are subject to inherent risks and
uncertainties that could cause actual results or events to differ materially
from current expectations.  Please refer to the sections
“Forward-looking Statements” on page 1 and “Business of Brookfield Properties –
Company and Real Estate Industry Risks” on pages 32 to 40 of this AIF for a
discussion of certain of these risks and uncertainties and material facts and
assumptions related to the statements set forth in this section.




The term
“BPO Direct” refers to those properties which are wholly-owned or owned through
property-level joint ventures.  When referring to ownership of
properties by the U.S. or Canadian Office Fund, such ownership percentage refers
to that of the applicable fund and not the proportionate percentage ownership of
BPO.  See “Business of Brookfield Properties - Investment Strategy”
for a description of our interest in our funds.  Total area includes
commercial office, retail, storage and parking.




Manhattan,
New York




The New
York City market contains the largest area of office space in North
America.  The market has approximately 393million square feet of
office space with Midtown Manhattan containing approximately 240 million square
feet and Lower Manhattan with approximately 88 million square feet.




Midtown
Manhattan




The
Midtown Manhattan overall vacancy rate at December 31, 2009 was 12%, a 3.5%
increase from 8.5% at year end 2008.  Absorption was approximately
negative 11.1 million square feet during 2009, with the Class A sector
accounting for negative  9.1 million square feet (82.0% of all
negative absorption).  Midtown overall leasing activity for 2009 was
approximately 11.3 million square feet, 13% below last year’s 12.9 million
square feet.  Our average in-place net rent per square foot in this
market was $37.78 per square foot as at December 31, 2009, as compared to the
average market net rent of $50.00 per square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            
            Description245 Park
      Avenue
            1,787
            51%
      fee interest.  New York State Teachers’ Retirement System owns
      remaining 49% interest.
            
            Located
      on a full square block in Midtown Manhattan, 245 Park Avenue is a 1.8
      million square foot 46-story office tower.  The building is
      constructed of glazed brick, glass and steel and has an outdoor plaza for
      both tenant and public use. The building was built in 1967 and has
      undergone a complete renovation of the lobby, plaza and
      elevators.300 Madison
      Avenue
            1,094
            100%
      fee interest.
            
            Designed
      by Skidmore Owings & Merrill and completed in 2003, 300 Madison Avenue
      rises 35 stories in the heart of Midtown Manhattan, one block west of
      Grand Central Terminal. The elevated, spacious lobby features a striking
      8-story glass atrium ascending above the building’s main entrance at the
      corner of 42nd Street and Madison Avenue. The building features an
      auditorium, dining facilities and other amenities on the lower
      levels.





U.S.
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            
            DescriptionThe
      Grace Building
            1,557
            49.9%
      fee interest.
            
            The
      Grace Building is centrally located in Midtown Manhattan at 6th Avenue and
      42nd Street. Built in 1971, Skidmore, Owings & Merrill designed the
      tower. The building’s distinctive curved tower walls are set back from the
      street and oversized windows provide views of the Manhattan skyline, the
      Hudson River and Bryant Park. The building has a 188-space parking
      garage.1065 Ave
      of the Americas
            682
            99%
      fee interest.
            
            1065
      Avenue of the Americas is a 35-story tower, completed in 1958 and
      renovated in 1993.Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            
            Description1411 Broadway
            1,223
            49.9%
      fee interest.
            
            1411
      Broadway is a 40-story tower, completed in 1970 and renovated in
      1999.1460 Broadway
            220
            49.9%
      fee interest.
            
            1460
      Broadway is a 17-story tower, completed in 1951 and renovated in
      1999.





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 15




Lower
Manhattan




The Lower
Manhattan overall vacancy rate at December 31, 2009 was 9.6%, a 2.2% increase
from 7.4% at year end 2008.  Absorption was approximately negative 2.3
million square feet during 2009 compared to negative 2.1 million square feet in
2008.  Lower Manhattan leasing activity for 2009 was approximately 3.3
million square feet, 9% below last year’s 3.6 million square feet and the annual
historical average of 5.5 million square feet.  Our average in-place
net rent per square foot in this market was $27.27 per square foot as at
December 31, 2009, as compared to the average market net rent of $28.00 per
square foot at that time.




BPO
Direct




Property
              Total
      Area
                (000’s
      Sq.Ft.)
              Form
      and Percentage
                of
      Ownership
              
              DescriptionOne
      World Financial Center
              1,713
              100%
      leasehold interest.
              
              One
      World Financial Center is located at the south end of the four unique
      office towers, designed by Cesar Pelli, comprising the landmark World
      Financial Center complex that includes extensive public spaces and the
      spectacular Winter Garden.  One World Financial Center is a
      40-story tower which was completed in 1986.  The building is
      connected to the World Financial Center complex through an enclosed
      passageway.Two
      World Financial Center
              2,706
              100%
      leasehold interest.
              
              Two
      World Financial Center is a 44-story tower which was completed in
      1987.  Tower Two is one of the World Financial Center buildings
      which houses the world headquarters of Merrill Lynch.  Tower Two
      is directly connected to the retail area of the World Financial Center and
      the Winter Garden.Three
      World Financial Center
              1,307
              Share
      of a tenancy in common interest.
              
              Completed
      in 1985, Three World Financial Center is a 52-story tower, with our share
      of the building measuring 1,299,000 square feet of rentable area, and is
      world headquarters for American Express.  Three World Financial
      Center is connected to the rest of the World Financial Center complex
      through a courtyard, leading to the Winter Garden.Four
      World Financial Center
              1,952
              51%
      leasehold interest.  Merrill Lynch owns remaining 49% leasehold
      interest.
              
              Four
      World Financial Center is a 34-story tower which was completed in
      1986.  Tower Four is one of the World Financial Center buildings
      which houses the world headquarters of Merrill Lynch and is 100% leased to
      and occupied by Merrill Lynch.World
      Financial Center Retail
              290
              100%leasehold
      interest.
              
              Consists
      of 290,000 square feet of retail space in Two, Three and Four World
      Financial Center which houses numerous restaurants, major brand retailers
      and business services.One
      Liberty Plaza
              2,347
              100%
      fee interest.
              
              One
      Liberty Plaza is located in the financial district at Liberty Street and
      Broadway. This 54-story steel and glass tower  which was
      completed in 1972 was designed by Skidmore, Owings & Merrill for U.S.
      Steel and the strength of the building lies in the simplicity of its sleek
      glass and steel architecture. One Liberty Plaza offers sweeping views of
      New York Harbor and the five boroughs, soaring above the newly-renovated
      Zuccotti Park, which received the 2007 American Institute of Architects
      Merit Award.





U.S.
Office Fund




Property
              Total
      Area
                (000’s
      Sq.Ft.)
              Ownership
      Structure
              
              DescriptionOne
      New York Plaza
              2,585
              100%
      fee interest.
              
              One
      York Plaza is located at Water and Whitehall Street and is the
      southernmost of all Manhattan skyscrapers. Constructed in 1970, this
      50-story Downtown building is comprised of over 2.5 million square feet
      and has a unique 111,000 square foot base. The building underwent a
      renovation in 1995.Newport
      Tower
              1,100
              100%
      fee interest.
              
              Constructed
      in 1990, Newport Tower is a 36-story building that offers unobstructed
      views of the New York Harbor and Manhattan
  skyline.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 16




Boston,
Massachusetts




The
Downtown Boston office market consists of 50 million square feet in nine
sub-markets.  The Central Business District (“CBD”) sub-market, where
BPO’s 53 and 75 State Street properties are located, is Boston’s largest with
34.7 million square feet.  The Boston’s CBD overall vacancy rate in at
December 31, 2009 was 18.6%, an increase from 13.1% at year end
2008.  The Class A segment of the market ended the year with a 16.5%
vacancy compared to 12.7% in 2008.  Absorption was approximately
negative 506,000 square feet during 2009 compared to negative 271,000 square
feet in 2008.  Our average in-place net rent per square foot in this
market was $31.32 per square foot as at December 31, 2009, as compared to the
average market net rent of $28.00 per square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            Description53 State
      Street
            1,235
            100%
      leasehold interest.
            Located
      in the heart of Boston’s financial district, 53 State Street is a 40-story
      office tower that rises from the historic Boston Stock Exchange
      building.  The building was built in 1984.  The design
      of the building features a seven-story, glass-enclosed atrium that
      connects the two buildings and a reflective glass
  exterior.75 State
      Street
            1,031
            100%
      fee interest.
            75
      State Street is located in the heart of Boston's financial
      district.  This 31-story Art Deco office building, built in
      1988, consists of over one million square feet of office and retail space
      and a public parking garage which can accommodate 700 cars.  The
      building represents classic architectural design with extensive use of
      granite on the exterior facade and marble throughout the six-story great
      hall lobby, leading to the on-site retail, banking and food
      services.





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 17




Washington,
D.C.




Washington,
D.C. has emerged as one of the most coveted real estate investment markets in
the world.  The region’s economy has evolved and diversified from a
traditional government base into a robust, multi-dimensional commercial
center.  Economic drivers for the area include a significant
government presence, law firms, industry and trade group associations,
technology, and bio-tech firms.  This diverse economic base has
enabled the Washington area to remain economically healthy.  This
economic health has resulted in a stable tenant base, especially in the Downtown
office market.  The Washington metro area continues to be impacted by
the national recession, though the market has begun to feel some positive
effects of the new federal stimulus and regulatory programs.




The
Washington, D.C. overall vacancy rate at December 31, 2009 was 13.0%, a 2.5%
increase from 10.5% at year end 2008.  Absorption was approximately
853,000 square feet during 2009 compared to 3.3 million square feet in 2008. Our
average in-place net rent per square foot in this market was $25.13 per square
foot as at December 31, 2009, as compared to the average market net rent of
$32.00 per square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              Of
      Ownership
            Description1625 Eye
      Street
            571
            10%
      fee interest.  The remaining 90% is owned by
    Edge.
            1625
      Eye Street’s prominent design features a limestone and glass façade with a
      9-story light-filled atrium facing Eye Street. An illuminated 160-foot
      campanile offers upper floor tenants panoramic views of the Washington
      skyline.  The building was built in 2003.77K
      Street
            326
            50%
      fee interest.  The remaining 50% is owned by
ING.
            Located
      in the Capitol Hill submarket of Washington, D.C., two blocks from Union
      Station, 77 K Street a 326,000 square foot, eleven-story office building.
      77 K Street features a rooftop terrace with dramatic views of the U.S.
      Capitol and a private fitness facility.701
      9th Street
            547
            100%
      fee interest.
            Built
      in 2001, 701 9th Street is located across from the national Portrait
      Gallery and one block west of the Verizon Center.Potomac
      Tower
            441
            100%
      fee interest.
            Located
      at 1001 North 19th Street in Rosslyn, Virginia, Potomac Tower is situated
      across the Potomac River from Georgetown.  The building offers a
      panorama of the Washington, D.C. skyline including the national monuments
      and the Capitol and an open view corridor up and down the Potomac River.
      Designed by I.M. Pei and completed in 1989, Potomac Tower is one Metro
      stop from Washington, D.C.’s CBD, and less than 10 minutes from Washington
      Reagan National Airport.601 &
      701 South 12th Street
            562
            100%
      fee interest.
            Located
      on five acres in the Pentagon City submarket of Arlington, Virginia, 601
      and 701 South 12th Street consists of two 12-story office buildings. Green
      space connects the buildings. Built in 1982, the buildings were renovated
      in 2003 and 2004.





U.S.
Office Fund




Property
                  Total
      Area
                    (000’s
      Sq.Ft.)
                  Ownership
      Structure
                  Description1225 Connecticut
      Avenue
                  269
                  100%
      fee interest.
                  1225
      Connecticut Avenue is a freestanding 8-story structure with windows on all
      four sides. Originally built in 1968, the property offers retail space and
      underground parking on-site.  The property underwent an
      extensive interior and exterior renovation which was completed in
      2008.1200 K
      Street
                  434
                  100%
      fee interest.
                  Built
      in 1992, 1200 K Street is a 12-story building that is well located in the
      East End submarket of Washington, D.C.1250
      23rd Street
                  144
                  100%
      fee interest.
                  1250
      23rd St. was designed by H. Saka & Associates and opened in
      1989.1250 Connecticut
                  210
                  100%
      fee interest.
                  A
      unique Downtown building, 1250 Connecticut Avenue is a freestanding
      8-story structure with windows on all four sides. Originally built in
      1963, the property was renovated in 1996 and offers restaurants, retail
      and underground parking on site.1400 K
      Street
                  224
                  100%
      fee interest.
                  1400
      K was designed by Skidmore, Owings & Merrill and opened in 1981.
      Located in the East End business district, the building has views of
      beautiful Franklin Park. The 12-story building has windows on all four
      sides allowing abundant natural
light.
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 18
  Property
                  Total
      Area
                    (000’s
      Sq.Ft.)
                  Ownership
      Structure
                  Description2000
      L Street
                  383
                  100%
      fee interest.
                  Centrally
      located in the CBD, 2000 L Street is an 13-story office building that
      opened in 1968.  In 1998, the building entrance, lobby,
      storefronts and common areas were remodeled as part of a redesign by RTKL
      Associates. A large floor plate offers remarkable flexibility and
      efficiency for tenants large and small.2001
      M Street
                  264
                  98%
      fee interest.  The remaining 2% is owned by other
      partners.
                  Built
      in 1986, this 12-story office building is considered one of the most
      prominent office buildings in the Washington, D.C.
      market.  Located in the West End of the CBD and within the
      Golden Triangle BID, this beautiful, polished granite, Class A building
      has abundant parking and is close to numerous restaurants and
      shopping.2401 Pennsylvania
      Ave
                  93
                  100%
      fee interest.
                  Designed
      by Keyes Condon Florance, 2401 Pennsylvania Avenue was the recipient of
      The Washington Chapter of the American Institute of Architects (AIA/DC)
      “Award for Excellence in Architecture”. The mixed-use office, retail and
      residential building, built in 1990, is situated on the corner of
      Pennsylvania Avenue right at Washington Circle.Bethesda
      Crescent
                  336
                  100%
      fee interest.
                  Designed
      by Keyes Condon Florance, Bethesda Crescent is comprised of three office
      buildings located above the Bethesda Metro Station.  The
      buildings were built in 1955 and renovated in 1988.Silver
      Spring Metro Plaza
                  771
                  100%
      fee interest.
                  Built
      in 1986, Silver Spring Metro Plaza is comprised of three buildings
      conveniently located in the Downtown Silver Spring business
      district.One
      Reston Crescent
                  185
                  100%
      fee interest.
                  One
      Reston Crescent, built in 2000, is the first building of the Reston
      Crescent development, a 6-story structure with state-of-the-art building
      systems and an elegant 2-story lobby.  Reston Crescent is a
      36-acre, carefully phased master development set in a wooded park along
      the Dulles Corridor in Reston, Virginia.Two
      Reston Crescent
                  185
                  100%
      fee interest.
                  Two
      Reston Crescent, the second building of the Reston Crescent development,
      was completed in 2007.  It is a 6-story structure with
      state-of-the-art building systems and an elegant 2-story
      lobby.  Reston Crescent is a 36-acre, carefully phased master
      development set in a wooded park along the Dulles Corridor in Reston,
      Virginia.Sunrise
      Tech Park
                  316
                  100%
      fee interest.
                  Sunrise
      Technology Park is a professional complex of four contemporary office and
      research and development buildings situated in Northern Virginia’s
      Reston/Herndon Corridor. Built in 1985, each single story structure
      features wrap-around window lines.Two
      Ballston Plaza
                  223
                  100%
      fee interest.
                  Built
      in 1988, Two Ballston Plaza is an 11-story building located at the west
      end of the Rosslyn-Ballston corridor.Victor
      Building
                  347
                  49.9%
      of the fee interest.  The remaining interest is held by
      Principal.
                  Expanded
      and renovated in 2000, the Victor Building is a historic property located
      in the East End submarket in Washington, D.C. It is a freestanding 9-story
      office building.  The lobby and entrance have recently been
      renovated and a fitness center and rooftop terrace have been
      added.1550 &
      1560 Wilson Blvd
                  359
                  100%
      fee interest.
                  The
      1550 building is a 7-story pre-cast concrete building built in 1984. The
      lobby was upgraded in 2001 with an earth-tone marble floor and light wood
      accents on the walls. The 1560 building is 12-stories tall and was
      delivered in 1986 with a glass curtain wall system offering sweeping views
      of Arlington,
Virginia.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 19




Toronto,
Ontario




The
Toronto market contains the largest area of office space in
Canada.  The greater Toronto area has approximately 170million square feet of
office space divided equally between the suburbs and
Downtown.  Toronto’s Downtown has a total office space inventory of
68.6 million square feet.




The
Downtown Toronto overall vacancy rate at December 31, 2009 was 6.6%, a 2.8%
increase from 3.8% at year end 2008.  Vacancy in Class AA and A
markets in the financial core, where 90% of our buildings are located, was 7.2%
for the fourth quarter of 2009, compared to 3.6% at the end of
2008.  Our vacancy rate in this market is approximately
2.2%.  Downtown Toronto leasing activity in the fourth quarter of 2009
was approximately 1.4 million square feet an increase from last year’s 765,727
square feet in the same quarter.  Overall absorption in the financial
core for Class AA and A buildings in fourth quarter of 2009 was negative 213,750
square feet.  Our average in-place net rent per square foot in this
market was $24.18 per square foot as at December 31, 2009, as compared to the
average market net rent of $23.00 per square foot at that time.




BPO
Direct




Property
                Total
      Area
                  (000’s
      Sq.Ft.)
                Form
      and Percentage
                  of
      Ownership
                
                DescriptionBrookfield
      Place
                
                
                
                Brookfield
      Place consists of almost 3.2 million square feet of rentable commercial
      and parking space comprising two high-rise office towers located in
      Toronto’s financial core in the block bounded by Bay, Wellington, Yonge
      and Front Streets.  A 90-foot high glass enclosed galleria
      integrates the two office towers, the related retail space, the Hockey
      Hall of Fame and 13 other historical buildings.  With direct
      access to Union Station, the Metro Toronto subway system and Commerce
      Court, Brookfield Place is a key point of entry in the underground
      pedestrian walkway system in Toronto.-    Bay
      Wellington Tower
                1,340
                100%
      fee interest.
                
                Built
      in 1992, the Bay Wellington Tower is a 47-story tower located on the
      northern portion of Brookfield Place.-     22 Front
      Street
                  
                  
                  -     Retail
      and Parking
                144
                  
                  
                  743
                100%
      fee interest in 22 Front Street
                  
                  50%
      interest (on a psf basis)  in Retail and a 56% interest in
      Parking.  The remaining 50% interest in Retail and 44% interest
      in Parking  is owned by OMERS Realty
Corporation.
                
                This
      retail, heritage, office and parking complex is located between TD Canada
      Trust and Bay Wellington Towers and encompasses the office space in the
      historic and entertainment portion of Brookfield
      Place.  Brookfield Place includes retail on the concourse and
      main street levels, as well as 1,465  below-grade parking stalls
      serving Brookfield Place complex and the Downtown
  district.The
      Exchange Tower Block
                
                
                
                The
      Exchange Tower Block consists of two office towers including the Exchange
      Tower and 105 Adelaide, and the retail and parking components of the
      complex.-     Exchange
      Tower
                1,160
                50%
      leasehold interest in the North parcel (containing a 3-story building) and
      a 50% freehold and leasehold interest in the South Parcel (which includes
      the Exchange Tower).  The remaining 50% leasehold and freehold
      interests are held by TTC Pension Fund (25%) and Hospitals of Ontario
      Pension Fund (25%).
                
                Exchange
      Tower is located in Toronto’s financial core at the corner of York and
      King Streets.  The office property is integrated with the
      Toronto financial core and the underground pedestrian network as a
      component of the Exchange Tower Block.  The building was built
      1981 and renovated in 1999.-     105 Adelaide
      Street West
                232
                100%
      leasehold interest and a 25% fee interest in the Canadian Office Fund’s
      50% interest.  The other 50% freehold interest is owned by a
      Canadian life insurance company
                
                105
      Adelaide Street West, also known as Lombard Place, is a 12-story office
      property located in the financial core between the Exchange Tower and
      First Canadian Place. This class ‘A’ building was built in 1962 and
      completely renovated in 1990.
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information
Form
 20
  Property
                    Total
      Area
                      (000’s
      Sq.Ft.)
                    Form
      and Percentage
                      of
      Ownership
                    DescriptionHudson’s
      Bay Centre
                    1,092
                    100%
      leasehold interest and 100% fee interest in certain
      components.
                    The
      Hudson’s Bay Centre comprises an office tower at 2 Bloor Street East, the
      Bay department store and an extensive retail concourse with a variety of
      shops and services.  Built in 1973 and renovated in 2001, the
      building is directly above the intersection of two subway lines at the
      corner of Yonge and Bloor Streets and in close proximity to the Don Valley
      Expressway, the Hudson’s Bay Centre offers excellent
      accessibility.Queen’s
      Quay Terminal
                    504
                    100%
      fee interest.
                    Built
      in 1926 and renovated in 1983, Queen’s Quay Terminal is located in the
      waterfront in Downtown Toronto’s financial district.  The
      property also contains  condominium units which are owned
      freehold by other parties.Bay
      Adelaide Centre
                    1,200
                    100%
      fee interest.
                    Recently
      completed in September 2009, the Bay Adelaide Centre is located in
      Toronto’s financial core at the corner of Bay and Adelaide Streets. The
      project is a 51-story office tower and is integrated with the underground
      pedestrian network.  Bay Adelaide Centre is the first major development in the
      Toronto financial district in over 17 years.HSBC
      Building
                    225
                    100%
      fee interest in 1/3 of the property and a 100% leasehold interest in 2/3
      of the property.  The other freehold owner is a private
      investor.
                    The
      HSBC Building is located in Toronto’s financial core at the corner of
      Wellington and York Streets. The project is a 17-story office tower
      completed in 1990 and is integrated with the Toronto financial core and
      underground pedestrian
network.




Canadian
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Ownership
      Structure
            DescriptionFirst
      Canadian Place
            2,781
            50%
      fee interest.  The other 50% interest owner is a Canadian life
      insurance company.
            Located
      in Downtown Toronto, First Canadian Place is a complex consisting of
      office, banking, shopping complex and parking. With 72-storys, the office
      tower has remained unchallenged as the tallest office building in Canada
      since it was constructed in 1975.2 Queen
      St. E.
            545
            100%
      leasehold interest.
            2
      Queen Street East is situated in Toronto’s financial core and built in
      2003, the building is the city’s newest Downtown office
      tower.  The property’s unique design incorporates a historic
      1910 bank branch.  The property provides a direct connection to
      the city’s underground pedestrian walkway and is integrated with the Queen
      Street subway station.151 Yonge
      St.
            371
            100%
      fee interest.
            The
      Yonge Richmond Centre is situated in Toronto’s financial
      core.  The building was built in 1991 and renovated in
      1998.  The property provides a direct connection to the city’s
      underground pedestrian walkway and is connected to  2 Queen
      Street East to the north as well as the Queen Street subway
      station.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 21




Calgary,
Alberta




At the
end of 2009, our office properties, located centrally in Downtown Calgary,
accounted for approximately 5.9 million square feet of a total Downtown office
market inventory of approximately 35.5 million square feet.   The
Downtown Calgary market is largely driven by the oil and natural gas industries.
Though Calgary is the fifth largest city in Canada, it has the second highest
number of head offices in the country, second only to Toronto.




The
Downtown Calgary overall vacancy rate at December 31, 2009 was 11.6%, a 7.0%
increase from 4.6% at year end 2008.  Vacancy in Class AA and A
markets was 10.2% for the fourth quarter of 2009, compared to 2.1% at the end of
2008.  Our vacancy rate in this market is approximately
0.2%.  Overall absorption in 2009 was negative 1.5
million  square feet compared to negative 438, 960 square feet in
2008.  Our average in-place net rent per square foot in this market
was $27.81 per square foot as at December 31, 2009, as compared to the average
market net rent of $29.00 per square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            DescriptionBankers
      Hall
            2,577
            50%
      fee interest.  The remaining 50% interest is owned by
      BCIMC.
            Built
      in 1988, the Bankers Hall complex is comprised of three towers: East
      Tower, West Tower and the Royal Bank Building.  The East and
      West Towers and twin 52-story office towers sitting above a 7-story
      office/retail podium that integrates the historic Hollingsworth Building
      and the adjacent 26-story Royal Bank Building.Bankers
      Court
            324
            50%
      leasehold interest.  The remaining 50% interest is owned by
      BCIMC.
            Bankers
      Court, substantially completed in March 2009, is a 15-story office tower
      and is directly adjacent to Bankers Hall and connected by sky
      bridge.Suncor
      Energy Centre
            1,952
            50%
      fee interest. The remaining 50% interest is owned by ARCI
    Ltd.
            Suncor
      Energy Centre consists of a two-tower office-retail complex and
      underground parking garage.  The office towers are 52-story west
      tower and the 32-story east tower.  The property is located in
      the Calgary CBD and is connected to the above-ground pedestrian walkway
      system. The property was constructed in 1983 and is one of the top three
      office complexes in Calgary.Fifth Avenue
      Place
            1,681
            50%
      fee interest.  The remaining 50% interest is owned by Alberta
      Investment Management. (“AIMCO”)
            Fifth
      Avenue Place is comprised of two 35-story office towers.  Fifth
      Avenue Place, which is connected to the above-ground pedestrian walkway
      system, was completed in 1981, and since acquisition has undergone a
      substantial capital investment
program.





Canadian
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Ownership
      Structure
            DescriptionAltius
      Centre
            378
            100%
      fee interest.
            Altius
      Centre is situated in the heart of Downtown Calgary.  The
      property is a single tower, 31-story office building, directly connected
      to the city’s above-ground walkway system.  The building was
      built in 1973 and renovated in
1991.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 22




Ottawa,
Ontario




Ottawa is
Canada’s national capital.  Ottawa’s competitive office market
(excluding office buildings owned by the federal government) consists of
approximately 46.2 million square feet.  Ottawa’s downtown office
market consists of approximately 17.1 million square feet of competitive space
in all classes.




The
Ottawa CBD overall vacancy rate at December 31, 2009 was 3.7%, a 0.2% increase
from 3.5% at year end 2008.  Our vacancy rate in this market is
approximately 0.1%.  Overall absorption in the fourth quarter of 2009
for Class A buildings was approximately 14,000 square feet.  Our
average in-place net rent per square foot in this market was $17.41 per square
foot as at December 31, 2009, as compared to the average market net rent of
$21.00 per square foot at that time.




Canadian
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Ownership
      Structure
            DescriptionPlace
      de Ville I
            1,085
            100%
      leasehold interest.
            Place
      de Ville I is located in the western portion of Ottawa’s Downtown core in
      the block bounded by Albert Street, Kent Street, Queen Street and Lyon
      Street. Built in 1974 and renovated in 1994, the property is comprised of
      two towers (A and B), situated at right angles to each
    other.Place
      de Ville II
            1,043
            100%
      fee interest.
            Place
      de Ville II is located in the western portion of Ottawa’s Downtown core in
      the block bounded by Sparks Street, Kent Street, Queen Street and Lyon
      Street.  It is comprised of Tower C, a 29-story building, the
      Podium, a smaller 4- story building, a below grade retail service
      concourse which includes office space, retail outlets, a food court,
      storage space and, a four-level underground parking facility with 770
      parking stalls and storage facilities.  The building was built
      in 1971 and renovated in 1995.Jean
      Edmonds Towers
            649
            100%
      fee interest.
            Jean
      Edmonds Towers is located in the western portion of Ottawa’s Downtown core
      in the block bounded by Slater Street, Kent Street, Laurier Avenue West
      and Bank Street. Built in 1974 and renovated in 1994, the property is
      comprised of two 20-story buildings linked at ground level by a 1-story
      building which serves as a restaurant. The remaining ground floor
      premises, situated in the towers themselves, offer retail
      services.






Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 23




Los
Angeles, California




The Los
Angeles County market is approximately 193.1 million square feet.  The
Los Angeles County overall vacancy rate at December 31, 2009 was 17.1%, a 4.6%
increase from 12.5% at year end 2008.  Absorption was approximately
negative 6.6 million  square feet during 2009 as compared to negative
3.1 million square feet during 2008.  Los Angeles County leasing
activity for 2009 was approximately 890,616 square feet, down from last year’s
1.6 million square feet.  Our average in-place net rent per square
foot in this market was $21.90 per square foot as at December 31, 2009, as
compared to the average market net rent of $22.00 per square foot at that
time.




U.S.
Office Fund




Property
                Total
      Area
                  (000’s
      Sq.Ft.)
                Ownership
      Structure
                DescriptionFigueroa
      at Wilshire
                1,162
                100%
      fee interest.
                The
      52-story office tower, completed in 1990, features a Brazilian Rose
      polished granite exterior, two dramatic, 75-foot high atria lobbies, and
      an open-air plaza highlighted by a 36-foot tall fire and water
      feature.Bank
      of America Plaza
                1,765
                100%
      fee interest.
                Bank
      of America Plaza was completed in 1974. The 55-story office tower is
      situated on a 4.21-acre site that features a unique formal garden with
      over 200 trees and three 24-foot waterfalls. Near the building’s main
      entrance is the 42-foot-high “Four Arches” sculpture by Alexander
      Calder.Ernst &
      Young Tower
                1,636
                100%
      fee interest.
                Built
      in 1985 and designed by Skidmore, Owings and Merrill, Ernst & Young
      Plaza is a 41 story granite and glass tower situated in the Los Angeles
      CBD on approximately 4 acres. Situated below the park-like plaza area is 7
      + FIG, a tri-level open air retail center.Landmark
      Square
                655
                100%
      fee interest.
                Located
      in Downtown Long Beach, Landmark Square, was built in 1991.  The
      26-story office building features granite throughout the lobby, high
      ceilings, and unique works by local artists.  A beautifully
      designed garden located on the rooftop of the parking structure can be
      seen from almost every floor of the building.  Landmark Square
      has more than 1300 parking spaces that lead to both the lobby of the
      building as well as Pine Avenue.Marina
      Towers
                468
                50%
      leasehold interest.
                  A
      family trust holds the remaining 50% interest.
                Marina
      Towers is comprised of two 12-story towers, completed in 1970 and 1972,
      overlooking the Los Angeles County small boat and yacht harbor in Marina
      Del Rey. The towers are architecturally mirrored with vertical bands of
      glass and engaged columns. A free-standing, six level parking structure
      and retail storefront sits between the two towers. Located prominently at
      the East border of Marina del Rey, tenants have unobstructed views in
      every direction.5670 Wilshire
      Blvd.
                445
                100%
      fee interest.
                5670
      Wilshire Boulevard is a 27-story office building, built in 1965 and
      renovated in 1990.  Outside of the serene granite clad lobby is
      a landscaped courtyard leading to the 5-story parking
      structure.9665 Wilshire
      Blvd.
                235
                100%
      fee interest.
                9665
      Wilshire Boulevard is a 10-story office building located in Beverly
      Hills.  The building was built in 1972 and renovated in
      1993.Westwood
      Center
                329
                100%
      fee interest.
                Westwood
      Center is a 22-story office building, built in 1965 and completely
      renovated in 2000.  The building features floor-to-ceiling
      glass, a beautifully designed lobby with abundant natural light and state
      of the art communication systems.Wachovia
      Center
                661
                100%
      leasehold interest.
                Built
      in 1983, Wachovia Center is a 25-story Class A office building located in
      the Brentwood area of Los Angeles.  The building offers large
      floor plates, beautiful ocean, city and mountain views and is within
      walking distance of Brentwood’s many restaurants, banks and retail
      services.Howard
      Hughes Center
                
                
                Howard
      Hughes Center is a first-class multi-building project located on the
      Westside of Los Angeles and convenient to the Los Angeles International
      Airport, Marina Del Rey and the South Bay.  The complex includes
      landscaped plazas, restaurants, theaters, a health club and retail
      services.-6060 Center
      Drive
                381
                100%
      fee interest.
                6060
      Center Drive is a 10-story office building, completed in
      1999.  It is nestled against a gentle water feature adjoining
      the main central courtyard and large, 25,000 foot floor plates. The
      building includes 20,000 square feet of basement
  space.
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 24
  Property
                Total
      Area
                  (000’s
      Sq.Ft.)
                Ownership
      Structure
                Description-6080 Center
      Drive
                479
                100%
      fee interest.
                6080
      Center Drive is a 12-story office building, completed in
      2001.  The lobby features natural stone and glass and
      incorporates the striking adjacent exterior landscape for a distinctly
      sophisticated feel.The building
      includes 20,000 square feet of basement space.-6100
      Center Drive
                462
                100%
      fee interest.
                6100
      Center Drive is a 12-story, 284,000-square-foot building completed in
      2003.-6601
      Center Drive
                150
                100%
      fee interest.
                Also
      known as Northpoint Tower, this 7-story office building was completed in
      1991 and sits at the tip of the center.-Howard
      Hughes Tower
                477
                100%
      fee interest.
                Howard
      Hughes Tower is a 16-story Class A office building with efficient floor
      plates and unobstructed views.  The first building in the
      complex, the tower was built in 1987 and renovated in
  2001.-Spectrum
      Club
                37
                100%
      fee interest.
                This
      single-user building was constructed and leased as a health club,
      providing a first-class amenity to the surrounding complex and neighboring
      revitalized community.701 B
      Street
                560
                100%
      leasehold interest.
                701
      B Street is a 24-story Class A office building, completed in 1982, and
      located in Downtown San Diego.707 Broadway
                315
                100%
      leasehold interest.
                707
      Broadway is 18-story building built in 1963, renovated in 1988, and
      located in Downtown San Diego.Arden
      Towers at Sorrento
                618
                100%
      fee interest.
                Arden
      Towers at Sorrento is an office and retail complex completed in 1991 and
      located in the Sorrento Mesa submarket north of downtown San
      Diego.  The complex consists of four office towers and an
      adjacent 54,000 square foot retail
center.
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 25
  Houston,
Texas




Houston
is the largest city in the State of Texas and the fourth largest in the United
States.  The Houston office market is represented by a diversified
group of industries, including a significant presence of oil and gas
companies.  Currently, the Houston CBD is comprised of approximately
46.8 million square feet of office space. The overall vacancy rate at December
31, 2009 was 11.2%, a 1.3% increase from 9.9% at year end
2008.  Absorption was approximately 245,681 square feet during 2009
compared to negative 6,929 square feet in 2008.  Houston leasing
activity for 2009 was approximately 2.5 million square feet for the CBD and 9.9
million square feet for the non-CBD compared to 2.2 million square feet for the
CBD and 12.1 million square feet for the non-CBD in 2008.  Our average
in-place net rent per square foot in this market was $12.99 per square foot as
at December 31, 2009, as compared to the average market net rent of $21.00 per
square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            Description1201
      Louisiana
            892
            100%
      fee interest.
            Situated
      in Houston's CBD, 1201 Louisiana is a 35-story building comprising 892,000
      square feet. The property features direct connection to Houston's
      all-weather tunnel/skywalk system which provides direct access to Allen
      Center and the Hyatt Regency Hotel as well as many eateries and retail
      shops. Outfitted with mirror-finished reflective glass, 1201 Louisiana
      offers distinctive architecture and views of the city are highlighted by
      full floor-to-ceiling windows. The building was built in 1971 and
      renovated in 1981 and 1996.  The building is three blocks from
      the light rail and has three levels of on-site parking.





U.S.
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Ownership
      Structure
            DescriptionCullen
      Center
            
            
            The
      Cullen Center complex consists of  four office towers: 500
      Jefferson, Continental Center I, Continental Center II and KBR
      Tower.  Parking is available in four attached garages and there
      are several Metro stops adjacent to the complex. Cullen Center is
      inter-connected via an overhead walkway and is accessible to the Downtown
      tunnel system.-           500 Jefferson
            434
            100%
      fee interest.
            Built
      in 1962, 500 Jefferson is a 20-story office tower in the Cullen Center
      complex.-           Continental  Center
      I
            1,509
            100%
      fee interest.
            Built
      in 1984, Continental Center I is a 51-story office tower in the Cullen
      Center complex.-           Continental
      Center II
            530
            100%
      fee interest.
            Built
      in 1972, Continental Center II is a 20-story office tower in the Cullen
      Center complex.-           KBR
      Tower
            1,302
            50%
      fee interest and ground lease interest.
            Built
      in 1973 and renovated in 1991, KBR Tower is a 40-story office tower in the
      Cullen Center complex.Allen
      Center
            
            
            Allen
      Center is a Class A office complex in Downtown
      Houston.    Allen Center is the only Downtown Houston
      development that incorporates a significant amount of green space into the
      common area plazas.  Served by the Downtown tunnel system, Allen
      Center is adjacent to several Metro bus and Downtown trolley
      stops.-           One
      Allen Center
            993
            100%
      fee interest.
            Completed
      in 1972 and renovated in 1992, One Allen Center is a 34-story office tower
      in the Allen Center complex.-           Two
      Allen Center
            996
            100%
      fee interest.
            Completed
      in 1978 and renovated in 1992, Two Allen Center is a 36-story office tower
      in the Allen Center complex.-           Three
      Allen Center
            1,195
            100%
      fee interest.
            Completed
      in 1980, Three Allen Center is a 50-story office tower in the Allen Center
      complex.-           1400
      Smith Street
            1,267
            100%
      fee interest.
            Completed
      in 1983, 1400 Smith Street is a 50-story office tower in the Allen Center
      complex.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 26




Denver,
Colorado




Denver
has embarked upon a number of initiatives to weather the economic
downturn.  Investment in public transportation, aggressive economic
development includes a two-decade campaign to diversify the region’s economic
base from oil and gas dependency  to alternative energy, aerospace,
technology, biotechnology and telecommunications.




The
Downtown Denver office market consists of 23.3 million square
feet.  The Downtown Denver overall vacancy rate at December 31, 2009
was 18.2%, a 1.7% increase from 16.5% at year end 2008.  Absorption
was approximately negative 497,396 square feet during 2009 compared to negative
144,000 square feet in 2008.  Downtown Denverleasing
activity for 2009 was approximately 1.3 million square feet compared to 1.6
million square feet in 2008.  Our average in-place net rent per square
foot in this market was $18.23 per square foot as at December 31, 2009, as
compared to the average market net rent of $20.00per square
foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            DescriptionRepublic
      Plaza
            1,830
            100%
      fee interest.
            Built
      in 1984, Republic Plaza is Denver's tallest office building at 714 feet
      tall and 56 stories. Designed by Skidmore, Owings & Merrill and built
      of reinforced concrete clad in Sardinian granite, Republic Plaza includes
      1.2 million square feet of office space, and three retail levels. The
      building is known for its three-story marble lobby that features a
      quarterly "Art in Public Places" program of Colorado and regional
      artists.







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| Brookfield Properties Corporation | 2010 Annual Information Form
 27




Minneapolis,
Minnesota




The
diversified Minneapolis metropolitan economy, which is home to 18 Fortune 500
companies, including 3M, United Health Group, Best Buy and Target Corporation
has historically been one of the most resilient in the country.  Our
Minneapolis portfolio, totaling over three million square feet, is
well-positioned at the center of the financial, legal, and retail district in
Downtown Minneapolis and is well connected to the city’s above-ground, enclosed
skyway system and its pedestrian walking mall.




The
Minneapolis CBD office market has a total inventory of approximately 25.1
million square feet.  The Minneapolis CBD overall vacancy rate at
December 31, 2009 was 18.3%, a 2.7% increase from 15.6% at year end
2008.  Absorption was approximately negative 683,154 square feet
during 2009 compared to 78,971 square feet in 2008.  Our average
in-place net rent per square foot in this market was $9.10 per square foot as at
December 31, 2009, as compared to the average market net rent of $15.00 per
square foot at that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            Description33 South
      Sixth Street /
              City
      Center
            1,803
            WRAP
      mortgage lender.
            33
      South Sixth Street is a 50-story office building located in the heart of
      Minneapolis’ 64 square block skyway system. The building was constructed
      and opened in 1983.  The Minneapolis City Center component of
      the project consists of a retail mall renovated in 2005.  There
      are six skyway connections entering into the City Center. The project also
      houses the Minneapolis Marriott at City Center, a 584-room full- service
      hotel. The project also contains a 687 stall parking garage for office
      tower tenant and retail patrons.RBC
      Plaza /
              Gaviidae
      Common I & II
            1,248
            A
      100% freehold interest.
            RBC
      Plaza, located at 60 South 6th Street, is a mixed-use office and retail
      development in the Minneapolis financial district on the Nicollet Mall.
      The 40-story office tower was completed in 1991. The property also has 700
      underground parking stalls within the two Gaviidae garages. Gaviidae
      Common I and II is a five level retail center spanning two half-blocks on
      Nicollet Mall between 5th and 7th Streets, connected to the Downtown core
      by the 64 block skyway system.






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| Brookfield Properties Corporation | 2010 Annual Information Form
 28





Edmonton,
Alberta




The
Edmonton Downtown office market consists of approximately 15.1 million square
feet.  Edmonton’s overall vacancy rate at December 31, 2009 was 6.9%,
a 1.7% increase from 5.2% at year end 2008.  Our vacancy rate in this
market is approximately 1.2%.  Overall absorption in 2009 was negative
242,829 square feet compared to 242,152 square feet in 2008.  Our
average in-place net rent per square foot in this market was $15.29 per square
foot as at December 31, 2009, as compared to the average market net rent of
$19.96 per square foot at that time.




Canadian
Office Fund




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Ownership
      Structure
            DescriptionCanadian
      Western Bank Place
            498
            100%
      fee interest.
            Canadian
      Western Bank Place is a 30-story office tower, located at the intersection
      of Edmonton's downtown financial and government districts. Built in 1980
      and renovated 1999, the building has an exterior sheath of anodized
      aluminum panels and solar glass and distinctive double setback corners
      which make a bold architectural statement.Enbridge
      Tower
            214
            100%
      fee interest.
            Enbridge
      Tower, situated on the southwest corner of Jasper Avenue and 102 Street,
      was built in 1981.  The building is characterized by its
      eight-story atrium lobby and its 38.5 degree sloped metal
      roof.







Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 29




Vancouver,
British Columbia




The
Vancouver Downtown office market consists of approximately 19.1 million square
feet.  The overall vacancy rate in the Vancouver core at December 31,
2009 was approximately 7.0%, a 2.2% increase from 4.8% at year end
2008.  Our vacancy rate in this market is approximately
5.9%.  Overall absorption in 2009 was negative 427,042 square feet
compared to negative 70, 577 square feet in 2008. Our average in-place net rent
per square foot in this market was $16.29 per square foot as at December 31,
2009, as compared to the average market net rent of $24.71 per square foot at
that time.




BPO
Direct




Property
            Total
      Area
              (000’s
      Sq.Ft.)
            Form
      and Percentage
              of
      Ownership
            DescriptionRoyal
      Centre
            853
            100%
      fee interest.
            Royal
      Centre is a Class A office building located in the prime CBD of Downtown
      Vancouver that was most recently renovated in 2001. This 36-story building
      is adjacent to the Vancouver Hyatt Regency Hotel.  Located on
      the corner of Georgia and Burrard, Royal Centre is conveniently situated
      within the business and retail amenities of Downtown
      Vancouver.  The property has two retail levels with shops and
      services  with direct access to the Burrard Skytrain station, in
      addition to parking for 688 vehicles in a three-level underground parking
      garage.









Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 30




Service
Businesses




Brookfield
LePage Johnson Controls Facility Management Services




Brookfield
LePage Johnson Controls, one of the largest facilities management operations in
Canada, is owned 40% by BPO in partnership with Johnson Controls. This joint
venture manages nearly 199 million square feet of premises for major
corporations and government, comprised of 101 million square feet of facility
management services, 67 million square feet of workplace technology services and
30 million square feet of energy and sustainability services, representing
growth of 22 million square feet of facility management services and 30 million
square feet of energy and sustainability services.




Brookfield
Residential Management Services




Brookfield
Residential Services Ltd. has been managing condominiums in the Greater
Metropolitan Toronto area for the past 30 years and manages in excess of 56,000
units in over 283 condominium corporations.




Employees




As of
December 31, 2009, we had approximately 2,153 employees:  37 in our
Corporate Group, 779 in our U.S. Commercial Operations Group, 658 in our
Canadian Commercial Operations Group, 299 in our Residential Land Group and 380
employees in our Residential Management Services Group.  Approximately
223 of our U.S. employees and 98 of our Canadian employees who are employed in
our office portfolio operations are represented by unions and 10 of our
employees who are employed in our Residential Land Group are represented by
labor unions.  We consider our labor relations to be positive and
anticipate maintaining agreements with our labor unions.




Environmental
Protection




We are
firmly committed to the continuous improvement of energy performance and the
sustainability profile of our North American office portfolio, both within
existing buildings and in new developments. We continue to expand and enhance
the features, systems and programs that foster energy efficiency at our
properties, as well as the wellness and safety of our tenants, employees and the
community.   Each of our properties undergoes routine,
comprehensive environmental reviews and upgrades. Renovations are undertaken
with the most environmentally conscious products reasonably available. The goal
is to provide high quality office space while reducing operating costs. Energy
efficiency is a top priority throughout the company.





We have a
three-pronged strategy toward achieving maximum sustainability and energy
conservation in our office assets:





1.
            Incorporate
      innovative energy conservation strategies to achieve best-in-industry
      environmental performance in all new office
  developments;




2.
            Capitalize
      on opportunities to redevelop, retrofit, redesign and renovate properties
      within the existing portfolio to realize maximum energy efficiency and
      reduction in carbon footprint; and




3.
            Take
      leadership positions in green industry organizations and undertake new
      initiatives that foster the sustainability of commercial
      properties.




We intend
to build all new developments to a LEED Gold standard and we have achieved LEED
certification at eight properties within our existing office
portfolio.





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 31




Company
and Real Estate Industry Risks




Our
strategy is to invest in high-quality commercial properties defined by the
certainty of receiving rental payments generated by the tenants of those
assets.  However, we remain exposed to certain risks specific to our
portfolio and those inherent in the commercial property business.




Therefore,
in evaluating BPO and our business, the following challenges, uncertainties and
risks should be considered in addition to the other information contained in
this AIF.




If
the global market and economic crisis intensifies or continues for a long
period, disruptions in the capital and credit markets may adversely affect our
business, financial condition and results of operations.




Global
market and economic conditions over the past two years have been unprecedented
and challenging with tighter credit conditions, slower growth through 2009 and
recession in the North American economy continuing into 2010. Continued concerns
about the systemic impact of inflation, the availability and cost of credit, the
declining real estate market, energy cost, geopolitical issues and increased
market uncertainty have contributed to increased market volatility and
diminished expectations for the global economy. These conditions, combined with
declining business activity levels and consumer confidence, increased
unemployment and volatile oil prices, have contributed to unprecedented levels
of volatility in the capital and credit markets. If the global market and
economic crisis intensifies or continues for a long period, disruptions in the
capital and credit markets may adversely affect our business, financial
condition and results of operations.




As a
result of these market conditions, the cost and availability of credit have been
and may continue to be adversely affected by illiquid credit markets and wider
credit spreads. Concern about the stability of the markets generally and the
strength of counterparties specifically has led many lenders and institutional
investors to reduce and, in some cases, cease to provide funding to businesses
and consumers. While we currently believe that we have sufficient working
capital and capacity under our credit facilities in the near term, continued
turbulence in the global markets and economies and prolonged declines in
business and consumer spending may adversely affect our liquidity and financial
condition, as well as the liquidity and financial condition of our tenants. If
these market conditions persist in the long term, they may limit our ability,
and the  ability of our tenants, to replace maturing liabilities in a
timely manner, and access the credit markets to meet liquidity
needs.




Until the
financial and real estate markets stabilize, we have limited our capital
deployment activities to situations where we are fulfilling existing
commitments. There can be no assurance that the markets will stabilize in the
near future or that we will choose to or be able to increase our levels of
capital deployment at such time or ever. In addition, a continued increase in
the cost of credit and inability to access the capital and credit markets may
adversely impact the occupancy of our properties, the disposition of our
properties and private capital raising. Additionally, business layoffs,
downsizing, industry slowdowns and other similar factors that affect our tenants
may adversely push direct and sublease availabilities up and associated rents
and other fundamentals down. Furthermore, general uncertainty in the real estate
markets has resulted in conditions where the pricing of certain real estate
assets may be difficult due to uncertainty with respect to capitalization rates
and valuations which may adversely impact our net asset value. In addition, we
may face difficulty in refinancing our mortgage debt, or may be unable to
refinance such debt at all, if our property values significantly
decline.




In the
event that we do not have sufficient cash available to us through our operations
to continue operating our business as usual, we may need to find alternative
ways to increase our liquidity. Such alternatives may include, without
limitation, divesting ourselves of properties, whether or not they otherwise
meet our strategic objectives in the long term, at less than optimal terms;
issuing and selling our debt and equity in public or private transactions under
less than optimal conditions; entering into leases with tenants at lower rental
rates or less than optimal terms; or entering into lease renewals with our
existing tenants without an increase in rental rates at turnover. There can be
no assurance, however, that such alternative ways to increase our liquidity will
be available to us. Additionally, taking such measures to increase our liquidity
may adversely affect our business, financial condition and results of
operations.




Our
economic performance and the value of our real estate assets are subject to the
risks incidental to the ownership and operation of real estate
properties.




Our
economic performance, the value of our real estate assets and, therefore, the
value of shareholders’ investments are subject to the risks normally associated
with the ownership and operation of real estate properties, including but not
limited to: downturns and trends in the national, regional and local economic
conditions where our properties are located; the cyclical nature of the real
estate industry; local conditions such as an oversupply of office properties,
including space available by sublease, or a reduction in demand for high rise
and other office properties; changes in interest rates and the availability of
financing; competition from other properties; changes in market rental rates and
our ability to rent space on favorable terms; the bankruptcy, insolvency, credit
deterioration or other default of our tenants; the need to periodically
renovate, repair and re-lease space and the costs thereof; increases in
maintenance, insurance and operating costs; civil disturbances, earthquakes and
other natural disasters, or terrorist acts or acts of war which may result in
uninsured or underinsured losses; the attractiveness of our properties to
tenants; and certain significant expenditures, including property taxes,
maintenance costs, mortgage payments, insurance costs and related charges that
must be made regardless of whether or not a property is producing sufficient
income to service these expenses.In
addition, leases with the Canadian federal government are on a semi-gross basis
whereby deemed operating costs are increased or decreased annually based on
changes in the consumer price index.  Actual increases or decreases in
operating costs may vary significantly from the amounts recoverable on account
thereof in these leases.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 32




We
are dependent upon the economic climates of our primary markets.




Substantially
all of our revenues are derived from properties located in our primary markets –
New York, Boston, Washington, D.C., Toronto, Calgary, Los Angeles, Houston and
Ottawa.  A prolonged downturn in the economies of these markets, or
the impact that a downturn in the overall national economies of the United
States or Canada may have upon these markets, could result in reduced demand for
office space.  Because our portfolio consists primarily of office
buildings (as compared to a more diversified real estate portfolio), a decrease
in demand for office space could adversely affect our results of
operations.  Additionally, there are submarkets within our primary and
secondary markets that are dependent upon a limited number of industries, and a
significant downturn in one or more of these industries could also adversely
affect our results of operations.




The
impact of foreign exchange fluctuations may have a negative impact on our future
revenues and net income.




Our
financial results will be affected by fluctuations in foreign currency markets
as certain assets and liabilities denominated in currencies other than the U.S.
dollar will give rise to a foreign currency gain or loss reflected in our
revenue and income.  Consequently, due to the substantial volatility of
currency exchange rates, we cannot predict the effect of exchange rate
fluctuations upon our future revenue. We do attempt to mitigate the impact of
exchange rate fluctuations on net income by matching foreign currency revenues
with foreign currency gains and through maintaining a monetary foreign currency
position. As a result, we are generally not materially impacted by the movement
in the Canadian to U.S. dollar exchange rate.




We
face risks associated with the use of debt to finance our business, including
refinancing risk.




We incur
debt in the ordinary course of our business and therefore are subject to the
risks associated with debt financing.  These risks, including the
following, may adversely affect our financial condition and results of
operations: our cash flow may be insufficient to meet required payments of
principal and interest; payments of principal and interest on borrowings may
leave us with insufficient cash resources to pay operating expenses; we may not
be able to refinance indebtedness on our properties at maturity due to company
and market factors including: the current disruptions in the capital and credit
markets; the estimated cash flow of our properties; the value of our properties;
financial, competitive, business and other factors, including factors beyond our
control;  and if refinanced, the terms of a refinancing may not be as
favorable as the original terms of the related indebtedness.




If we are
unable to refinance our indebtedness on acceptable terms, or at all, we may need
to dispose of one or more of our properties upon disadvantageous terms,
prevailing interest rates or other factors at the time of refinancing could
increase our interest expense, and if we mortgage property to secure payment of
indebtedness and are unable to make mortgage payments, the mortgagee could
foreclose upon such property or appoint a receiver to receive an assignment of
our rents and leases. This may adversely affect our ability to make
distributions or payments to our investors and lenders.




If we are unable
to manage our interest rate
risk effectively, our cash flows and operating results may
suffer.




Advances
under unsecured credit facilities and certain property-level mortgage debt bear
interest at a variable rate.  Approximately 43% of our total
outstanding indebtedness of $11.5 billion at December 31, 2009 was variable
rate indebtedness.  We may incur indebtedness in the future that also
bears interest at a variable rate or we may be required to refinance our debt at
higher rates.  Accordingly, increases in interest rates above that
which we anticipated based upon historical trends could adversely affect our
cash flows.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 33




We
face potential adverse effects from tenant defaults, bankruptcies or
insolvencies.




A tenant
may experience a downturn in its business, which could cause the loss of that
tenant or weaken its financial condition and result in the tenant’s inability to
make rental payments when due or, for retail tenants, a reduction in percentage
rent payable.  If a tenant defaults, we may experience delays and
incur costs in enforcing our rights as landlord and protecting our
investments.




We cannot
evict a tenant solely because of its bankruptcy.  A court, however,
may authorize a tenant to reject and terminate its lease with us.  In
such a case, our claim against the tenant for unpaid, future rent would be
subject to a statutory cap that might be substantially less than the remaining
rent owed under the lease.  In any event, it is unlikely that a
bankrupt tenant will pay in full amounts it owes us under a
lease.  The loss of rental payments from tenants and costs of
re-leasing could adversely affect our cash flows and results of
operations.  In the event of a significant number of lease defaults
and/or tenant bankruptcies, our cash flow may not be sufficient to pay cash
dividends to our stockholders and repay maturing debt and any other
obligations.




Reliance
on major tenants could adversely affect our results of operations.




As of
December 31, 2009, the five largest tenants, based on percentage of square feet
leased, accounted for approximately 19.9% of our total leasable space and no one
tenant (other than Bank of America/Merrill Lynch which accounted for
approximately 7.6% of our leasable space) accounted for more than 2.7% of that
total. Our business would be adversely affected if any of these tenants failed
to renew certain of their significant leases, became insolvent, declared
bankruptcy or otherwise refused to pay rent in a timely fashion or at
all.




Our
tenant base is concentrated heavily in three industries and unfavourable
conditions in these industries may adversely impact our financial condition and
results of operations.




Our
tenant base is concentrated heavily in three industries, namely, financial
services, government and oil and gas, representing approximately 54%, 11% and
18%, respectively, of our net operating income and approximately 83% of our net
operating income in the aggregate.  As a result, our financial
condition and results of operations would be adversely affected if there was a
prolonged downturn in these industries, or if the impact of downturn in the
overall national economies of the United States or Canada affected these
industries and resulted in reduced demand for office space.




Our
inability to enter into renewal or new leases on favorable terms for all or a
substantial portion of space that is subject to expiring leases would adversely
affect our cash flows and operating results.




Our
income-producing properties generate revenue through rental payments made by
tenants of the properties.  Upon the expiry of any lease, there can be
no assurance that the lease will be renewed or the tenant
replaced.  The terms of any subsequent lease may be less favorable to
us than the existing lease.  We could be adversely affected, in
particular, if any major tenant ceases to be a tenant and cannot be replaced on
similar or better terms.  Approximately 9% of our leases, on average,
mature annually over the next five years and excluding Bank of America/Merrill
Lynch, our largest tenant, approximately 7% of our leases, on average, mature
annually over the next five years.




Our insurance may not cover some
potential losses or may not be obtainable at commercially reasonable rates,
which could adversely affect our financial condition and results of
operations.




We carry
various insurance coverages that provide comprehensive protection for first
party and third party losses to our properties.  These coverages
contain policy specifications, limits and deductibles customarily carried for
similar properties.  We also self-insure a portion of certain of these
risks.  We believe all of our properties are adequately
insured.




We
maintain all risk property insurance and rental value coverage (including
coverage for the perils of flood, earthquake and named windstorm). Our all risk
policy limit is $1.5 billion per occurrence. Our earthquake limit is $300
million per occurrence and in the annual aggregate for our California properties
and a separate $300 million per occurrence and annual aggregate limit for all
other properties. This coverage is subject to a deductible of 5% of the value of
the affected property for California locations and $100,000 for all other
locations. The named windstorm limit is $300 million per occurrence and in the
annual aggregate subject to a deductible of 5% of the value of the affected
property. The flood limit is $300 million per occurrence and in the annual
aggregate subject to a deductible of $50,000 per occurrence.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 34




Our
portfolio is concentrated in large metropolitan areas, some of which have been
or may be perceived to be subject to terrorist attacks.  Furthermore,
many of our properties consist of high-rise buildings, which may also be subject
to this actual or perceived threat.  The Terrorism Risk Insurance Act
(“TRIA”) was enacted in November 2002 in response to the uncertainty surrounding
the insurance market in the aftermath of the terrorist attacks of September 11,
2001 and provides protection for “certified acts” as defined by the statute.
TRIA mandates that insurance carriers offer insurance covering physical damage
from terrorist incidents as certified by the U.S. Secretary of the Treasury. On
December 22, 2005, the Terrorism Risk Insurance Extension Act of 2005 (the
“Extension Act”) was enacted, which extended the duration of the TRIA program
until December 31, 2007. The Terrorism Risk Insurance Program Reauthorization
Act of 2007 (“TRIPRA”) was signed into law on December 26, 2007. It extends the
TRIA program through December 2014. TRIPRA effectively continues the Extension
Act while removing the distinction between foreign and domestic acts of
terrorism, among other provisions.




With
respect to our U.S. properties (including our U.S. Office Fund), in October
2008, we formed a segregated cell captive facility, Liberty IC Casualty, LLC
(“Liberty”). Liberty now provides $2.5 billion of TRIA coverage for all U.S.
properties and replaces what was provided by Realrisk Insurance Corporation, a
wholly-owned captive insurance company. In 2009 we formed a second segregated
cell captive facility, Liberty IC Casualty II, LLC (“Liberty II). Liberty II
provides protection against losses due solely to biological, chemical or
radioactive contamination arising out of a certified terrorist act. In the event
of a covered loss in 2010, we expect Liberty IC Casualty II LLC to recover 85%
of its losses, less certain deductibles, from the United States government with
the remaining 15% to be funded by us.




Our
Canadian properties are protected by a stand alone policy that covers all acts
of terrorism for limits up to C$1 billion.




There are
certain types of risks (generally of a catastrophic nature, such as war, or
environmental contamination, such as toxic mold) which are either uninsurable or
not economically insurable.  Should any uninsured or underinsured loss
occur, we could lose our investment in, and anticipated profits and cash flows
from, one or more of our properties, and would continue to be obligated to repay
any recourse mortgage indebtedness on such properties.




If
we are unable to recover from a business disruption on a timely basis our
financial condition and results of operations would be adversely
affected.




Our
business is vulnerable to damages from any number of sources, including computer
viruses, unauthorized access, energy blackouts, natural disasters, terrorism,
war and telecommunication failures.  Any system failure or accident
that causes interruptions in our operations could result in a material
disruption to our business.  If we are unable to recover from a
business disruption on a timely basis, our financial condition and results of
operations would be adversely affected.  We may also incur additional
costs to remedy damages caused by such disruptions.




We
are dependent on our management personnel.




Our
management team has a significant role in our success.  Our lack of a
mature human capital strategy to address retention, development of talent and
training may impede our ability to retain personnel or to attract suitable
replacements should any members of the management group
leave.   The loss of services from members of the management
group or a limitation in their availability could adversely affect our
operations because of diminished relationships with lenders, prospective tenants
and industry personnel.




We
may be unable to complete development and redevelopment projects at all or on
advantageous terms.




On a
strategic and selective basis, we may develop and redevelop properties. 
The real estate development and redevelopment business involves significant
risks that could adversely affect our business, financial condition and results
of operations, including:  we may not be able to complete construction on
schedule or within budget, resulting in increased debt service expense and
construction costs and delays in leasing the properties; we may not be able to
obtain, or may experience delays in obtaining, all necessary zoning, land-use,
building, occupancy and other governmental permits and authorizations;
  we may not be able to lease properties at all or on favorable terms;
 construction costs, total investment amounts and our share of remaining
funding may exceed our estimates and projects may not be completed and delivered
as planned; and upon completion of construction, we may not be able to obtain,
or obtain on advantageous terms, permanent financing for activities that we have
financed through construction loans.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 35




Because
real estate investments are illiquid, we may not be able to sell properties when
appropriate.




Large and
high quality office properties like the ones that we own can be hard to sell,
especially if local market conditions continue to be poor.  Such
illiquidity could limit our ability to vary our portfolio promptly in response
to changing economic or investment conditions.  Additionally,
financial difficulties of other property owners resulting in distressed sales
could depress real estate values in the markets in which we operate in times of
illiquidity, such as in the current economy.  These restrictions
reduce our ability to respond to changes in the performance of our investments
and could adversely affect our financial condition and results of
operations.




We
have no corporate limitation on the amount of debt we can incur.




Our
management and Board of Directors have discretion under our articles of
incorporation and bylaws to increase the amount of our outstanding
debt.  Our decisions with regard to the incurrence and maintenance of
debt are based on available investment opportunities for which capital is
required, the cost of debt in relation to such investment opportunities, whether
secured or unsecured debt is available, the effect of additional debt on
existing financial ratios and the maturity of the proposed new debt relative to
maturities of existing debt.  As a result, we could become more highly
leveraged, resulting in increased debt service costs that could adversely affect
our cash flows and operating results.




Our competitors
may adversely affect our ability to lease
our properties which may cause our cash flows and operating results to
suffer.




Each
segment of the real estate business is competitive.  Numerous other
developers, managers and owners of office properties compete with us in seeking
tenants and management revenues.  Although it is our strategy to own
premier office properties in each market in which we operate, some of the office
properties of our competitors may be newer, better located or better
capitalized.  These competing properties may have vacancy rates higher
than our properties, which may result in their owners being willing to make
space available at lower prices than the space in our properties, particularly
if there is an oversupply of space available in the
market.  Competition for tenants could have an adverse effect on our
ability to lease our properties and on the rents that we may charge or
concessions that we must grant.  If our competitors adversely impact
our ability to lease our properties, our cash flows and operating results may
suffer.




We
do not have sole control over the properties that we own with co-venturers,
partners, fund investors or co-tenants or over the revenues and certain
decisions associated with those properties, which may limit our flexibility with
respect to these investments.




We
participate in joint ventures, partnerships, co-tenancies and funds affecting 81
of our properties.  Of our 110 commercial office properties, 25 are
wholly owned, 14 are held in property-level joint ventures or co-tenancies, and
71 are held in our funds.  Investments in partnerships, joint
ventures, co-tenancies or other entities may involve risks not present were a
third party not involved, including the possibility that our partners,
co-tenants or co-venturers might become bankrupt or otherwise fail to fund their
share of required capital contributions.  Additionally, our partners,
co-venturers or co-tenants might at any time have economic or other business
interests or goals which are inconsistent with our business interests or
goals.  In addition, we do not have sole control of certain major
decisions relating to these properties, including decisions relating to: the
sale of the properties; refinancing; timing and amount of distributions of cash
from such properties to BPO; and capital improvements.




In some
instances, although we are the property manager for a joint venture, the joint
ventures retain joint approval rights over various material matters such as the
budget for the property, specific leases and our leasing
plan.  Moreover, in some of our property management arrangements the
other venturer can terminate the property management agreement in limited
circumstances relating to enforcement of the property managers’
obligations.  In addition, the sale or transfer of interests in some
of our joint ventures and partnerships is subject to rights of first refusal or
first offer and some joint venture and partnership agreements provide for
buy-sell or similar arrangements.  Such rights may be triggered at a
time when we may not want to sell but may be forced to do so because we may not
have the financial resources at that time to purchase the other party’s
interest.  Such rights may also inhibit our ability to sell our
interest in a property or a joint venture or partnership within our desired time
frame or on any other desired basis.




We
face risks associated with property acquisitions.




Assuming
we are able to obtain capital on commercially reasonable terms, and that market
conditions warrant it, we may acquire new office
properties.  Competition from other well-capitalized real estate
investors, including both publicly traded real estate investment trusts and
institutional investment funds, may significantly increase the purchase price or
prevent us from acquiring a desired property.  We may be unable to
finance acquisitions on favorable terms, or newly acquired properties may fail
to perform as expected.  We may underestimate the costs necessary to
bring an acquired property up to standards established for its intended market
position or may be unable to quickly and efficiently integrate new acquisitions
into our existing operations.  We may also acquire properties subject
to liabilities and without any recourse, or with only limited recourse, with
respect to unknown liabilities.  Each of these factors could have an
adverse effect on our results of operations and financial
condition.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 36




The
residential homebuilding and land development industry is cyclical and is
significantly affected by changes in general and local economic and industry
conditions.




The
residential homebuilding and land development industry is cyclical and is
significantly affected by changes in general and local economic and industry
conditions, such as consumer confidence, employment levels, availability of
financing for homebuyers and interest rates, levels of new and existing homes
for sale, demographic trends and housing demand. Competition from rental
properties and resale homes, including homes held for sale by investors and
foreclosed homes, may reduce our ability to sell new homes, depress prices and
reduce margins for the sale of new homes. Homebuilders are also subject to risks
related to the availability and cost overruns. Furthermore, the market value of
undeveloped land, buildable lots and housing inventories held by us can
fluctuate significantly as a result of changing economic and real estate market
conditions. If there are significant adverse changes in economic or real estate
market conditions, we may have to sell homes at a loss or hold land in inventory
longer than planned. Inventory carrying costs can be significant and can result
in losses in a poorly performing project or market. Our residential property
operations may be particularly affected by changes in local market conditions in
Alberta and Ontario in Canada, and Colorado, Texas and Missouri in the U.S.
where we derive a large proportion of our residential property
revenue.




Most
customers finance their home acquisitions through lenders providing mortgage
financing. Mortgage rates have recently been at or near their lowest levels in
many years. Despite this, and given the dramatic issues being experienced in the
mortgage markets in the U.S. and by many lenders, fewer loan products and
tighter loan qualification requirements have made it more difficult for
borrowers to procure mortgages.




Even if
potential customers do not need financing, changes in interest rates and
mortgage availability could make it harder for them to sell their homes to
potential buyers who need financing, which in the U.S. has resulted in reduced
demand for new homes. As a result, rising mortgage rates could adversely affect
our ability to sell new homes and the price at which we can sell
them.




The
expiration of long-term ground leases could adversely affect our results of
operations.




Fifteen
of our major properties are subject to long-term ground leases and similar
arrangements in which the underlying land is owned by a third party and leased
to us and any co-venturers or partners.  In addition, the ground
leases may be subject to periodic rate resets which may fluctuate and may result
in significant rental rate adjustments.  Under the terms of a typical
ground lease, we and any co-venturers or partners pay rent for the use of the
land and are generally responsible for all costs and expenses associated with
the building and improvements.  Unless the lease term is extended, the
land, together with all improvements, will revert to the owner of the land upon
the expiration of the lease term.  An event of default by us under the
terms of a ground lease could also result in a loss of the property subject to
such ground lease should the default not be rectified in a reasonable period of
time.  If possible, we may attempt to purchase these leases as they
become available, but cannot be assured of this.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 37




The
following is a summary of our ground leases:




Building
            City
            Expiration
            Notes105
      Adelaide Street West
            Toronto
            2043(1)
            We
      own a 100% leasehold interest and a 25% interest in the ground lessor
      which holds a 50% freehold interest.First
      Canadian Place
            Toronto
            2023
            We
      own a 25% interest in the ground lessor which holds a 50% freehold
      interest.  We also own a 25% interest in the ground lessee which
      holds a 100% leasehold interest.Marina
      Towers
            Los
      Angeles
            2063Wachovia
      Center
            Los
      Angeles
            2066Place
      de Ville I
            Ottawa
            2065
            There
      are two ground leases for this property.One,
      Two, Three and Four World Financial Center
            New
      York
            2069701
      B Street
            San
      Diego
            2069,
      2076
            There
      are two ground leases for this property.Hudson’s
      Bay Centre
            Toronto
            2070,
      2011
            There
      are two ground leases that cover a portion of this
    property.HSBC
      Building (70 York Street)
            Toronto
            2083
            Ground
      lease only covers a portion of the property707
      Broadway
            San
      Diego
            2089
            There
      are two ground leases  that cover a portion of this
      property.2
      Queen Street East
            Toronto
            2099
            Only
      a small portion of this property is subject to the ground lease (0.15
      acres of 0.99 acres). We own a 25% leasehold interest in the leasehold
      parcel and a 25% interest in the freehold parcel.Bankers
      Hall
            Calgary
            2101
            We
      own a 50% interest in the ground lease.Royal
      Bank Building
            Calgary
            2101
            We
      own a 50% interest in the ground lessor.KBR
      Tower
            Houston
            2057Exchange
      Tower
            Toronto
            2891,
      2115, 2232
            There
      are three ground leases for this property. We own a 50% interest in the
      ground lessor of a portion of the
property.


(1)
            Ground
      lessee has the option to extend the ground lease for an additional 30
      years to 2073.




We
are subject to possible environmental liabilities and other possible
liabilities.




As an
owner and manager of real property, we are subject to various United States and
Canadian federal, provincial, state and municipal laws relating to environmental
matters.  These laws could hold us liable for the costs of removal and
remediation of certain hazardous substances or wastes released or deposited on
or in our properties or disposed of at other locations.  The failure
to remove or remediate such substances, if any, could adversely affect our
ability to sell our real estate or to borrow using real estate as collateral,
and could potentially result in claims or other proceedings against
us.  We are not aware of any material non-compliance with
environmental laws at any of our properties.  We are also not aware of
any pending or threatened investigations or actions by environmental regulatory
authorities in connection with any of our properties or any material pending or
threatened claims relating to environmental conditions at our
properties.  We have made and will continue to make the necessary
capital expenditures for compliance with environmental laws and
regulations.  Environmental laws and regulations can change rapidly
and we may become subject to more stringent environmental laws and regulations
in the future.  Compliance with more stringent environmental laws and
regulations could have an adverse effect on our business, financial condition or
results of operation.




Asbestos-containing
material (“ACM”) is known to be present at a limited number of our
properties.  We are also aware of the presence of polychlorinated
biphenyls (“PCBs”) in transformers at certain of our properties and in storage
containers in specified areas at certain properties.  We believe that
we manage and require the removal of ACMs and PCBs in accordance with applicable
laws and that, if such laws do not become materially more stringent, the future
costs of ACM abatement or ACM and PCB removal and containment will not be
material to our financial position.




The
Americans with Disabilities Act and Canadian regulations under building codes
and provincial human rights codes generally require that public buildings,
including office buildings, be made accessible to disabled
persons.  Non-compliance could result in the imposition of fines by
the government or the award of damages to private litigants.  If we
are required to make substantial alterations and capital expenditures in one or
more of our properties, it could adversely affect our financial condition and
results of operations




We may
also incur significant costs complying with other regulations.  Our
properties are subject to various federal, state and local regulatory
requirements, such as state and local fire and life safety
requirements.  If we fail to comply with these requirements, we could
incur fines or private damage awards.  We believe that our properties
are currently in material compliance with all of these regulatory
requirements.  However, we do not know whether existing requirements
will change or whether compliance with future requirements will require
significant unanticipated expenditures that will affect our cash flow and
results from operations.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 38




The
failure of certain of our subsidiaries to qualify as a REIT under U.S. tax
rules would have adverse tax consequences which could materially affect the cash
flows we realize.




We
believe that certain of our subsidiaries are qualified for taxation as REITs
under U.S. tax rules and we intend that they continue to meet the
requirements for taxation as REITs, but we cannot assure shareholders that any
will qualify as a REIT. If certain of our subsidiaries fail to qualify for
taxation as REITs in any taxable year, we will face serious tax consequences for
the following reasons:




·
            the
      subsidiaries will be subject to tax on their taxable income at regular
      corporate rates;




·
            the
      subsidiaries will not be able to deduct, and will not be required to make,
      distributions to their stockholders, including us, in any year in which
      they fail to qualify as
a REIT;




·
            the
      subsidiaries could be subject to federal alternative minimum tax and/or
      increased state and local
taxes; and




·
            unless
      the subsidiaries are entitled to relief under specific statutory
      provisions, they will be disqualified from taxation as REITs for the four
      taxable years following the year during which they lose their
      qualification.




Qualification
as a REIT is governed by highly technical and complex tax laws for which there
are only limited judicial and administrative interpretations. Even a technical
or inadvertent mistake could endanger the REIT status of certain of our
subsidiaries. The determination that certain of our subsidiaries qualify as
REITs also requires an ongoing analysis of various facts and circumstances, some
of which may not be within our or the subsidiary’s control. For example, to
qualify as a REIT, at least 95% of its gross income must come from sources that
are itemized in the U.S. tax laws relating to REITs, and the REIT is
prohibited from owning specified amounts of debt or equity securities of some
issuers. REITs are also required to distribute to stockholders at least 90% of
their REIT taxable income, excluding capital gains. The fact that certain of our
subsidiaries hold some of their assets through joint ventures and their ongoing
reliance on factual determinations, such as determinations related to the
valuation of assets, further complicate the application of the REIT
requirements. Furthermore, the United States Internal Revenue Service (the
“IRS”) could change tax laws and regulations or the courts may issue new rulings
that make it more difficult or impossible for certain of our subsidiaries to
maintain REIT status. We cannot guarantee that certain of our subsidiaries will
be qualified and taxed as a REIT because qualification and taxation as a REIT
will depend upon its ability to meet the requirements imposed under the U.S. tax
rules, on an ongoing basis.  The additional tax liabilities resulting
from the failure of certain of our subsidiaries to qualify as a REIT could
materially affect our realizable cash flows.




Even
if certain of our subsidiaries qualify as REITs, they are required to pay some
taxes, which may result in less cash available for distribution to
stockholders.




Even if
certain of our subsidiaries qualify as a REIT for federal income tax purposes,
they are required to pay some federal, state and local taxes on their income and
property. For example, Brookfield Properties, Inc. (“BPI”) was a “C” corporation
prior to its first REIT year in 2008 and BPI still owns interests in appreciated
assets that it held before its conversion to a REIT. If such appreciated
property is sold prior to January 1, 2018, BPI generally will be subject to
tax at regular corporate rates on the built-in gain in that property at the time
of the REIT conversion. The total amount of gain on which BPI can be taxed is
limited to the excess of the aggregate fair market value of its assets on
January 1, 2008 over the adjusted tax basis of those assets at that time.
If incurred, this tax could be material. As a result, it might decide to seek to
avoid a taxable disposition prior to January 1, 2018 of any significant
asset owned by BPI at the time of the REIT conversion. This could be true with
respect to a particular disposition even if that potential disposition would be
advantageous if it were not for the potential tax liability. A REIT also may be
subject to the “alternative minimum tax” under some circumstances.




Additionally,
a REIT will be subject to a 4% non-deductible excise tax on the amount, if any,
by which dividends paid by it in any calendar year are less than the sum of 85%
of its ordinary income, 95% of its capital gain net income and 100% of its
undistributed income from prior years.




In
addition, if a REIT has net income from “prohibited transactions”, that income
will be subject to a 100% federal tax. In general, prohibited transactions are
sales or other dispositions of property held primarily for sale to customers in
the ordinary course of business. The determination as to whether a particular
sale is a prohibited transaction depends on the facts and circumstances related
to that sale. While certain of our subsidiaries will undertake sales of assets
if those assets become inconsistent with our long-term strategic or return
objectives, we do not believe that those sales should be considered prohibited
transactions. There can be no assurance, however, that the IRS would not
successfully contend otherwise.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 39




In
addition, a REIT may have to pay some state or local income taxes because not
all states and localities treat REITs the same as they are treated for federal
income tax purposes. From time to time changes in state and local tax laws or
regulations are enacted, which may result in an increase in its tax liability.
The shortfall in tax revenues for states and municipalities in recent years may
lead to an increase in the frequency and size of such changes. If such changes
occur, we may be required to pay additional taxes on the REIT’s assets or
income. These increased tax costs could adversely affect our financial condition
and results of operations and the amount of cash available for payment
of dividends.




Several
of our corporate subsidiaries have elected to be treated as “taxable REIT
subsidiaries” for federal income tax purposes. A taxable REIT subsidiary is a
fully taxable corporation and is limited in its ability to deduct interest
payments made to the REIT. In addition, a REIT will be subject to a 100% penalty
tax on some payments that it receives if the economic arrangements among its
tenants, its taxable REIT subsidiaries and it are not comparable to similar
arrangements among unrelated parties. Even if certain of our subsidiaries
qualify as REITs, or as taxable REIT subsidiaries, they will be required to pay
federal, state or local taxes, and we will have less cash available for
distribution to shareholders.




Changes
in tax law and practice may have a material adverse effect on our financial
condition and results of operations.






We hold
certain of our subsidiaries through foreign subsidiaries and our decision to
structure them in such a manner was based on prevailing taxation law and
practice in such jurisdictions.  Any change in tax legislation (including
in relation to taxation rates) and practice in these jurisdictions could
adversely affect such company or entity and consequently have a material adverse
effect on our financial condition and results of operations.




If
we were a passive foreign investment company, or PFIC, for U.S. federal
income tax purposes, U.S. shareholders generally would be subject to
adverse U.S. federal income tax consequences.




We do not
believe that we will be classified for U.S. federal income tax purposes as
a PFIC for our current taxable year, and we do not expect that we will be
classified as a PFIC in the future. However, the determination of whether we are
a PFIC in any taxable year depends on various facts and circumstances, some of
which may not be entirely within our control. The PFIC determination also
depends on application of complex tax rules concerning the classification of our
assets and income, for which there are only limited judicial and administration
interpretations, and therefore these rules are uncertain in some respects.
Further, the PFIC determination is made annually and our circumstances may
change. Accordingly, there can be no assurance that we will not be classified as
a PFIC for the current taxable year or any future taxable year. If we were a
PFIC, U.S. shareholders generally would be subject to adverse
U.S. federal income tax consequences, including increased taxes and related
interest charges on a disposition or constructive disposition of our common
shares or the receipt of certain distributions or constructive distributions and
increased reporting requirements.  We urge U.S. shareholders to
consult their own tax advisors regarding the tax consequences of our being a
PFIC in light of their particular circumstances.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 40




DIVIDENDS
AND DIVIDEND POLICY




The
declaration and payment of dividends on our common shares are at the discretion
of our Board of Directors, which supports a stable and consistent dividend
policy.  In early 2001, we changed our policy to declare dividends in
U.S. dollars and to remit payment to shareholders in accordance with the country
of the registered address of shareholders.  Shareholders with
registered addresses in Canada receive payment in Canadian dollars (based on the
exchange rate on the record date) unless they elect otherwise.  In
2001 our Board of Directors introduced quarterly payments rather than the
previous semi-annual dividend.  It is our intention to continue to
review the pay-out of dividends payable quarterly on March 31, June 30,
September 30 and December 31 of each year and to increase the amount in
accordance with increases in cash flow.




In
February 2007, our Board of Directors approved an increase in the quarterly
dividend on our common shares by 11% beginning on June 30,
2007.  Based upon this increase, on a post-split basis, the June 30,
2007 dividend was $0.56 per share per annum.




A
complete record of dividends per share paid on the common shares for the past
three years is as follows:




2009
            2008
            2007Per
      common share
            $0.56
            $0.56
            $0.55(1)


(1)
            Dividend was increased on June 30,
      2007 to an effective annualized rate of $0.56 per
      share.





We
continue to pay dividends on our Class A preference shares semi-annually and
dividends on our Class AA and Class AAA preference shares
quarterly.  A complete record of dividends per share paid on all
classes of preference shares for the past three years is as
follows:




($,
      except share information)
              2009
              2008
              2007Authorized
              Outstanding
              
              
              Per
      Share
              Per
      Share
              Per
      Share14,202,000
              14,201,980
              
              Class
      A redeemable voting, Series A & B
              C$0.0833
              C$0.0833
              C$0.08332,000,000
              2,000,000
              
              Class
      AA Series E
              C$0.4480
              C$0.8776
              C$1.017812,000,000
              8,000,000
              
              Class
      AAA Series E
              C$0.4267
              C$0.8457
              C$0.48308,000,000
              8,000,000
              
              Class
      AAA Series F
              C$1.5000
              C$1.5000
              C$1.50006,000,000
              4,400,000
              
              Class
      AAA Series G
              $1.3125
              1.3125
              1.31258,000,000
              8,000,000
              
              Class
      AAA Series H
              C$1.4375
              C$1.4375
              C$1.43758,000,000
              8,000,000
              
              Class
      AAA Series I
              C$1.3000
              C$1.3000
              C$1.30008,000,000
              8,000,000
              
              Class
      AAA Series J
              C$1.2500
              C$1.2500
              C$1.25008,000,000
              6,000,000
              
              Class
      AAA Series K
              C$1.3000
              C$1.3000
              C$1.300011,500,000
              11,500,000
              
              Class
      AAA Series L(1)
              C$0.45308
              -
              -11,000,000
              11,000,000
              
              Class
      AAA Series N(2)
              -
              -
              - (1)
                The Series
      L  preference shares were issued on September 24, 2009 and an
      initial dividend of C$0.45308 per share was paid on December 31,
      2009.  The annual dividend rate on these shares is C$1.6875 per
      share.  No amounts were paid on September 30,
    2009.
 (2)
                The
      Series N preference shares were issued on January 20, 2010.  The
      initial Series N dividend of C$0.2949 per share will be paid on March 31,
      2010.  The annual dividend rate on these shares is C$1.5375 per
      share.  No amounts were paid in
2009.


N




DESCRIPTION
OF CAPITAL STRUCTURE






General
Description of Capital Structure




There are
currently three authorized classes of preference shares of BPO, as
follows:




Class A Preference
Shares — unlimited  authorized


4,612,500
Class A preference shares, Series A authorized, of which 4,612,495 are
issued and outstanding; and


9,589,500
Class A preference shares, Series B authorized, of which 9,589,485 are
issued and outstanding.




Class AA Preference
Shares — 6,000,000 authorized (2,400,000 shares have been issued and
redeemed)


2,000,000
Class AA preference shares, Series E authorized, of which 2,000,000
are issued and outstanding.




Class AAA Preference
Shares — unlimited authorized


12,000,000
Class AAA preference shares, Series E authorized, of which 8,000,000
are issued and outstanding;


8,000,000
Class AAA preference shares, Series F authorized, of which 8,000,000
are issued and outstanding;


6,000,000
Class AAA preference shares, Series G authorized, of which 4,400,000
are issued and outstanding;


8,000,000
Class AAA preference shares, Series H authorized, of which 8,000,000
are issued and outstanding;


8,000,000
Class AAA preference shares, Series I authorized, of which 8,000,000
are issued and outstanding;


8,000,000
Class AAA preference shares, Series J authorized, of which 8,000,000
are issued and outstanding;


8,000,000
Class AAA preference shares, Series K authorized, of which 6,000,000
are issued and outstanding;


11,500,000
Class AAA preference shares, Series L authorized, of which 11,500,000 are issued
and outstanding;


11,500,000
Class AAA preference shares, Series M authorized, of which 0 are issued and
outstanding;


11,000,000
Class AAA preference shares, Series N authorized, of which 11,000,000 are issued
and outstanding; and


11,000,000
Class AAA preference shares, Series O authorized, of which 0 are issued and
outstanding.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 41





There are
currently no authorized Class AA preference shares, Series A, B, C or
D, or Class AAA preference shares, Series A, B, C or D, as all
authorized preference shares of each of these series were issued and
subsequently redeemed and are no longer issuable.  There are an
unlimited number of common shares authorized, of which 501,420,398common shares
were issued and outstanding as of February 28, 2010.




Appendix C contains a
summary of the material rights, privileges, restrictions and conditions attached
to the Class A preference shares, the Class AA preference shares and
the Class AAA preference shares, in each case as a class, and attached to
the various issued and outstanding series thereof, as well as the material
rights, privileges, restrictions and conditions attached to the common
shares.  The summary is qualified in its entirety by the full text of
such attributes contained in the articles of BPO, which are available on our Web
site, www.brookfieldproperties.com
and SEDAR, www.sedar.com.




Ratings




We are
currently rated by two agencies.  The following table shows the credit
ratings issued by the rating agencies noted therein as at December 31, 2009 and
March 12, 2010:







DBRS
      Limited (“DBRS”)
            Standard
      & Poor’s Rating Service (“S&P”)Corporate
      rating
            BBB(high)
            BBBPreferred
      shares
            Pfd-3(high)
            P3(high)Outlook
            ―
            Negative





S&P’s
corporate credit ratings are on a rating scale that ranges from AAA to D, which
represents the range from highest to lowest quality of such securities
rated.  According to the S&P rating system, an entity rated “BBB”
has adequate capacity to meet its financial commitments.  However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the entity to meet its financial
commitments.  The ratings from AA to CCC may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
major rating categories.




S&P’s
Canadian preferred share ratings are on a rating scale that ranges from P-1 to
D, which represents the range from highest to lowest quality of such securities
rated.  According to the S&P rating system, a preferred share
rated P-3 is less vulnerable in the near term than other lower-rated
securities.  However, it faces uncertainties and exposure to adverse
business, financial or economic conditions, which could render the obligor
unable to meet its financial commitments.  The ratings from P-1 to P-5
may be modified by the addition of a (high), (mid) or (low) modifier to show
relative standing within the major rating categories.




DBRS’
corporate credit ratings are on a rating scale that ranges from AAA to D, which
represents the range from highest to lowest quality of such securities
rated.  According to the DBRS rating system, an entity rated “BBB” is
of adequate credit quality.  Protection of interest and principal is
considered adequate, but the entity is more susceptible to adverse changes in
financial and economic conditions, or there may be other adversities present
which reduce the strength of the entity.  The ratings from AA to CCC
may be modified by the addition of a (high) or (low) modifier to show relative
standing within the major rating categories.




DBRS’
preferred share ratings are on a rating scale that ranges from Pfd-1 to D, which
represents the range from highest to lowest quality of such securities
rated.  According to the DBRS rating system, a preferred share rated
“Pfd-3” is of adequate credit quality.  While protection of dividends
and principal is still considered acceptable, the issuing entity is more
susceptible to adverse changes in financial and economic conditions, and there
may be other adversities present which detract from debt
protection.  The ratings from Pfd-2 to Pfd-5 may be modified by the
addition of a (high) or (low) modifier to show relative standing within the
major rating categories.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 42




Credit
ratings are intended to provide investors with an independent measure of credit
quality of an issue of securities.  These credit ratings are not
recommendations to purchase, hold or sell our securities and do not comment as
to market price or suitability of a specific security for a particular
investor.  Credit ratings may not reflect the potential impact of all
risks on the value of securities.  There is no assurance that the
ratings will remain in effect for any given period or that a rating will not be
revised or withdrawn entirely by S&P or DBRS in the future if, in its
judgment, circumstances so warrant.




MARKET
FOR SECURITIES




Our
common shares are listed on the NYSE and TSX under the symbol
BPO.  Our Class A preference shares, Series A and B, and Class AA
preference shares, Series E are not listed on an exchange.  Our Class
AAA preference shares are listed on the TSX under the symbols “BPO.PR.F”,
“BPO.PR.U”, “BPO.PR.H”, “BPO.PR.I”, “BPO.PR.J”, “BPO.PR.K”, “BPO.PR.L” and
“BPO.PR.N”.  Our Class AAA preference shares, Series N (BPO.PR.N) did
not trade on the TSX in 2009.




The
following table sets forth the reported high and low trading prices and trading
volumes of our common shares as reported by the TSX and NYSE from January 2009
to December 2009:




TSX
            NYSEPrice Per Share
      ($)
            
            Price Per Share
      (US$)Month
            High
            Low
            Volume
            High
            Low
            VolumeDecember
            13.61
            11.82
            14,730,240
            13.02
            11.30
            53,471,200November
            12.57
            10.78
            12,897,474
            11.93
            9.95
            60,634,300October
            12.49
            10.81
            18,632,250
            12.16
            10.01
            88,190,600September
            12.59
            10.73
            21,626,426
            11.75
            9.72
            99,784,400August
            12.63
            10.02
            39,813,069
            11.67
            10.97
            120,391,600July
            10.24
            7.88
            15,807,718
            9.50
            6.78
            72,803,296June
            9.69
            8.04
            23,373,063
            8.70
            6.96
            78,117,904May
            9.90
            8.10
            22,017,218
            8.72
            7.07
            115,246,096April
            9.79
            6.86
            18,849,538
            8.11
            5.41
            131,982,304March
            8.00
            5.31
            18,160,272
            6.51
            4.11
            136,304,192February
            8.40
            6.15
            13,204,886
            6.87
            4.92
            114,019,104January
            9.79
            6.29
            9,439,231
            8.23
            5.01
            88,974,400





The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series F (BPO.PR.F) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
            High
            Low
            VolumeDecember
            25.30
            25.00
            171,302November
            25.37
            24.40
            226,748October
            24.65
            24.40
            269,605September
            25.49
            24.19
            324,931August
            24.50
            22.10
            295,778July
            22.50
            21.23
            89,958June
            22.47
            21.42
            139,823May
            21.99
            19.10
            142,527April
            19.94
            15.40
            90,100March
            17.44
            14.90
            62,700February
            16.94
            14.00
            56,866January
            18.25
            15.10
            202,556







Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 43




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series G (BPO.PR.U) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
            High
            Low
            VolumeDecember
            21.75
            20.87
            54,900November
            21.73
            20.40
            147,767October
            22.05
            20.01
            45,405September
            22.00
            20.91
            52,505August
            22.42
            18.00
            76,947July
            18.11
            16.45
            71,370June
            17.64
            16.00
            67,761May
            16.40
            13.11
            51,590April
            14.51
            9.51
            213,230March
            9.90
            8.01
            63,415February
            10.80
            9.65
            52,690January
            12.25
            8.26
            187,588




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series H (BPO.PR.H) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
            High
            Low
            VolumeDecember
            23.72
            23.06
            229,425November
            23.29
            22.00
            300,729October
            22.73
            22.00
            216,560September
            23.25
            22.36
            185,362August
            23.08
            19.34
            181,747July
            19.29
            17.76
            211,884June
            18.87
            17.25
            231,317May
            18.10
            15.08
            133,952April
            16.00
            12.02
            468,776March
            12.65
            11.76
            100,532February
            13.75
            12.25
            78,032January
            14.44
            11.40
            182,281




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series I (BPO.PR.I) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
              High
              Low
              VolumeDecember
              25.60
              25.20
              128,695November
              25.73
              24.91
              234,970October
              25.00
              24.70
              439,444September
              25.05
              24.65
              747,494August
              24.95
              24.20
              389,226July
              24.99
              23.25
              273,812June
              24.59
              22.75
              169,991May
              23.70
              22.70
              196,533April
              23.48
              20.26
              242,878March
              21.20
              20.00
              188,959February
              21.47
              18.77
              102,740January
              21.00
              17.19
              280,696





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 44




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series J (BPO.PR.J) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
            High
            Low
            VolumeDecember
            23.49
            22.44
            95,940November
            23.75
            21.75
            120,806October
            22.50
            21.50
            252,230September
            23.60
            22.29
            191,192August
            22.84
            19.60
            146,586July
            19.60
            17.75
            106,126June
            19.70
            17.60
            212,187May
            18.53
            15.60
            147,506April
            16.26
            12.12
            113,281March
            12.94
            10.10
            122,515February
            13.45
            12.12
            69,005January
            14.05
            11.30
            68,400




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series K (BPO.PR.K) as reported by
the TSX from January 2009 to December 2009:




Price Per Share
      ($)Month
            High
            Low
            VolumeDecember
            22.82
            21.75
            42,971November
            22.70
            20.47
            155,308October
            21.94
            20.40
            81,981September
            22.39
            21.42
            130,389August
            22.16
            17.68
            100,707July
            18.20
            16.52
            96,574June
            18.00
            16.10
            222,323May
            16.50
            14.60
            101,683April
            14.98
            11.25
            110,062March
            12.39
            10.50
            74,524February
            12.85
            11.40
            80,370January
            13.25
            10.94
            85,492




The
following table sets forth the reported high and low trading prices and trading
volumes of our Class AAA preference shares, Series L (BPO.PR.L) as reported by
the TSX from September 2009 to December 2009:




Price Per Share
      ($)Month
              High
              Low
              VolumeDecember
              25.95
              25.40
              354,046November
              26.00
              25.02
              691,411October
              25.10
              24.80
              971,639September (September 24 to
      September 30)
              25.30
              24.90
              1,263,803





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 45




DIRECTORS
AND OFFICERS




The
names, principal occupations and municipalities of residence of our directors
and officers, as well as the year each director first became a director are set
out below.  Each director is appointed to serve until the next annual
meeting of shareholders or until his or her successor is elected or
appointed.




Directors




Name,
      municipality of residence
            
            Director
      since
            
            Principal
      Occupation and Five-year Occupation HistoryGORDON E.
      ARNELL
              Calgary,
      Alberta, Canada
            
            1989
            
            Mr.
      Arnell has been Chairman of our Board of Directors since
    1995.WILLIAM T. CAHILL(3)
              Ridgefield, Connecticut,
      U.S.A.
            
            2000
            
            Mr. Cahill
      has been Managing Director Independent Risk at Citi Community Capital
      since 2002.RICHARD B.
      CLARK
              New
      York, New York,
      U.S.A.
            
            2002
            
            Mr.
      Clark has been Chief Executive Officer of BPO since
  2002.JACK
      L. COCKWELL
              Toronto,
      Ontario, Canada
            
            1999
            
            Mr. Cockwell
      has been Group Chairman of BAM since 2002.J.
      BRUCE FLATT(2)
              Toronto,
      Ontario, Canada
            
            1996
            
            Mr.
      Flatt has been Senior Managing Partner and Chief Executive Officer of BAM
      since 2002.RODERICK
      D. FRASER, PH.D., O.C.(1)(3)
              Edmonton,
      Alberta, Canada
            
            2005
            
            Dr.
      Fraser has been President Emeritus of the University of Alberta since
      2005.PAUL
      D. MCFARLANE(1)(2)
              Mississauga,
      Ontario, Canada
            
            1998
            
            Mr.
      McFarlane is a
      corporate director.  He retired from a Canadian chartered bank
      in 2002 after more than 40 years of service.ALLAN
      S. OLSON(1)(3)
              Edmonton,
      Alberta, Canada
            
            1995
            
            Mr. Olson
      has been Chairman and Chief
      Executive Officer of First Industries Corporation, an investment and
      management company, since 1991.LINDA
      D. RABBITT(2)
              Bethesda,
      Maryland, U.S.A
            
            2005
            
            Ms.
      Rabbitt has been  Chief Executive Officer, Founder and Chairman
      of Rand Construction Corporation since 1989.ROBERT
      L. STELZL(1)
              Hamilton,
      Montana, U.S.A
            
            2005
            
            Mr.
      Stelzl is a private real estate investor and investment
      manager.  In 2003, he retired from Colony Capital, LLC, a large
      real estate private equity investor, after 14 years as a principal and
      member of the Investment Committee.DIANA
      L. TAYLOR(3)
              New
      York, New York, U.S.A
            
            2007
            
            Ms.
      Taylor has been a managing director of Wolfensohn & Co since 2007. She
      served as the Superintendent of Banks for the State of New York from June
      2003 through March 2007.JOHN E.
      ZUCCOTTI
              New
      York, New York, U.S.A.
            
            1998
            
            Mr.
      Zuccotti has been Co-Chairman of our Board of Directors since 2002,
      Chairman of the Board of Directors of Brookfield Financial Properties,
      Inc. since 1996 and Senior Counsel, Weil, Gotshal and Manges LLP since
      1998.


(1)
Member of the Audit Committee


(2)
Member of the Human Resources and Compensation Committee


(3)
Member of the Governance and Nominating Committee




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 46




Officers




See above
for descriptions of Gordon E. Arnell, Chairman, John E. Zuccotti, Co-Chairman,
and Richard B. Clark, Chief Executive Officer.




Name,
      municipality of residence
            
            Position
      Held
            
            Five-year
      Occupation HistorySTEVEN J.
      DOUGLAS
              Mississauga, Ontario,
      Canada
            
            President
            
            Mr.
      Douglas has held his present principal occupation since January 2009 and
      has been a Senior Managing Partner of BAM since 2006.  He was
      previously Executive Vice President and Chief Financial Officer of a
      mining company controlled by BAM from 2003 to 2006.  Mr. Douglas
      is also Senior Managing Partner of BAM’s global real estate
      group.THOMAS F.
      FARLEY
              Calgary, Alberta,
      Canada
            
            President
      and Chief Executive Officer, Canadian Commercial
Operations
            
            Mr.
      Farley has held his present principal occupation since January 2009, prior
      to which he was President and Chief Operating Officer, Canadian Commercial
      Operations since 2002.DENNIS H.
      FRIEDRICH
              New York, New York,
      U.S.A.
            
            President
      and Chief Executive Officer, U.S. Commercial Operations
            
            Mr. Friedrich
      has held his present principal occupation since January 2009, prior to
      which he was President and Chief Operating Officer, U.S. Commercial
      Operations since 2003.G. MARK BROWN
              New York, New York,
      U.S.A.
            
            Senior
      Vice President, Finance
            
            Mr.
      Brown has held his present principal occupation since 2005.BRYAN K. DAVIS
              New York, New York,
      U.S.A.
            
            Senior
      Vice President and
              Chief
      Financial Officer
            
            Mr.
      Davis has held his present principal occupation since 2007, prior to which
      he spent four years as Senior Vice President, Finance and one year as a
      Managing Partner of BAM.BRETT
      M. FOX
              New
      York, New York, U.S.A.
            
            Senior
      Vice President and General Counsel and Chief Compliance and Administrative
      Officer
            
            Mr.
      Fox has held his present principal occupation since
  2003.MICHELLE L.
      CAMPBELL
              New York, New York,
      U.S.A.
            
            Vice
      President, Compliance and Assistant General Counsel
            
            Ms.
      Campbell has held her present principal occupation since 2007, prior to
      which she was an associate at Torys LLP since 2002.MELISSA
      J. COLEY
              New
      York, New York, U.S.A.
            
            Vice
      President, Investor Relations and Communications
            
            Ms.
      Coley has held her present principal occupation since
  2002.P.
      KEITH HYDE
              Toronto,
      Ontario, Canada
            
            Vice
      President, Taxation
            
            Mr.
      Hyde has held his present principal occupation since
  1988.DANA
      PETITTO
              New
      York, New York, U.S.A.
            
            Vice
      President and Controller
            
            Ms.
      Petitto has held her present principal occupation since 2007, prior to
      which she was Assistant Controller of BPO since 2004.STEPHANIE
      A. SCHEMBARI
              New York, New York,
      U.S.A.
            
            Vice
      President, Human Resources
            
            Ms.
      Schembari has held her present principal occupation since
      2005.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 47




Share
Ownership




As of
March 12, 2010, the directors and executive officers of BPO own, directly or
indirectly, or exercise control or direction over approximately 9,213,146 common
shares, representing 1.8% of the outstanding voting shares.  See the
information on page 1 of our Management Proxy Circular dated March 8, 2010 under
the heading “Principal Holders of Voting Shares”, which is incorporated by
reference herein and available on SEDAR at www.sedar.com,
at www.sec.gov
and on our Web site at www.brookfieldproperties.com,
for further information regarding our share ownership.




LEGAL
PROCEEDINGS




We are
occasionally named as a party in various claims and legal proceedings which
arise during the normal course of our business.  We review each of
these claims, including the nature of the claim, the amount in dispute or
claimed and the availability of insurance coverage. Although there can be no
assurance as to the resolution of any particular claim, we do not believe that
the outcome of any claims or potential claims of which we are currently aware
will have a material adverse effect on us.




INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS




As of
March 12, 2010, no director, senior officer or associate of a director or senior
officer nor, to the knowledge of the directors or senior officers of BPO after
having made reasonable inquiry, any person or company who beneficially owns,
directly or indirectly, voting securities of BPO carrying more than 10% of the
voting rights attached to any class of voting securities of BPO outstanding at
the date hereof, or any associate or affiliate thereof, had any material
interest, direct or indirect, in any material transaction of BPO or its
affiliates nor do any such persons have a material interest, direct or indirect,
in any proposed transaction of BPO or its affiliates.




Our
parent company, BAM, and its affiliates may, from time to time, hold certain
indebtedness of BPO and its subsidiaries by way of transactions executed through
market intermediaries and under prevailing market terms and conditions at the
time of such transactions.  At December 31, 2009, we had approximately
$15 million (December 31, 2008 - $15 million) of indebtedness outstanding to BAM
and its affiliates. The outstanding balance on our $300 million facility with
BAM at December 31, 2009 was nil (December 31, 2008 – nil). Interest expense
related to this indebtedness, totaled $1 million for the year ended December 31,
2009 compared to nil for the year ended December 31, 2008. We also have a
balance on deposit with BAM of $648 million as of December 31, 2009, which is
due on demand and earns interest at a rate of LIBOR plus 42.5 basis points
(December 31, 2008 – nil). Interest income related to this loan totaled $2
million for the year ended December 31, 2009 (2008 – nil). Included in rental
revenues are amounts received from BAM and its affiliates for the rental of
office premises of $2 million for the year ended December 31, 2009 (2008 - $2
million). These amounts have been recorded at the exchange amount. In addition,
we have certain arrangements with BAM and its affiliates to acquire insurance in
the normal course of business and at market rates or at cost. The expense for
the year ended December 31, 2009 was $1 million.




AUDITORS,
TRANSFER AGENT AND REGISTRAR




Deloitte
& Touche LLP, the member firms of Deloitte Touche Tohmatsu and their
respective affiliates (collectively “Deloitte & Touche”) are the principal
external auditors of BPO.  Deloitte & Touche are
Chartered Accountants, having an address at Suite 1400, Brookfield Place,
181 Bay Street, Toronto, Ontario M5J 2V1.  Deloitte & Touche
has advised that it is independent of BPO within the meaning of the Rules of
Professional Conduct of the Province of Ontario.




The
transfer agent and registrar for BPO’s preference shares and common shares in
Canada is CIBC Mellon Trust Company at its principal office in Toronto,
Ontario.  The transfer agent and registrar for BPO’s common shares in
the United States is BNY Mellon Shareowner Services at its principal office in
Ridgefield Park, New Jersey.






Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 48




AUDIT COMMITTEE
INFORMATION
  The Audit
Committee is responsible for monitoring BPO’s systems and procedures for
financial reporting, risk management and internal controls, reviewing certain
public disclosure documents and monitoring the performance and independence of
our internal and external auditors.  The Audit Committee is also
responsible for reviewing BPO’s annual audited financial statements, unaudited
quarterly financial statements and management’s discussion and analysis of
financial condition and results of operations prior to their approval by the
full Board of Directors.
  The Audit
Committee charter sets out its responsibilities and duties, qualifications for
membership, procedures for committee member removal and appointment and
reporting to our Board of Directors.  A copy of the charter is
attached hereto as Appendix
D.




The Audit
Committee is comprised of four directors all of whom are independent directors:
Paul D. McFarlane (Chairman), Roderick D. Fraser, Allan S. Olson and Robert L.
Stelzl.  In addition to being independent directors under our Audit
Committee charter, all members of the Audit Committee must meet an additional
“independence” test under the Sarbanes-Oxley Act and National Instrument 52-110,
“Audit Committees” in that their directors’ fees are the only compensation they,
or their firms, receive from BPO and that they are not affiliated
with  and do not have a material relationship with
BPO.  Each member of the Audit Committee is Financially Literate and
Mr. McFarlane is considered to be an Audit Committee Financial Expert, as these
terms are defined under the applicable regulations.




Relevant Education and
Experience




Mr.
McFarlane acquired significant financial experience and exposure to accounting
and financial issues during his 43 year career in banking at a Canadian
chartered bank.  From 1994 until his retirement in 2002, he served as
Senior Vice President, Risk Management Division, Head Office and from 1986 to
1993 he served as Vice President where he had global responsibility for large
corporate and commercial credits.




Mr. Olson
acquired significant financial experience and exposure to accounting and
financial issues while serving in senior management positions, as a director and
as a member of the audit committees of several public and private
companies.  Mr. Olson holds a Bachelor of Science degree in
engineering from the University of Alberta and a Master of Business
Administration degree from the University of Western Ontario.




Mr.
Fraser acquired significant financial experience and exposure to accounting and
financial issues in his capacities as President, University of Alberta from 1995
to 2005, Vice President, Resources at Queens University from 1988 to 1994 and
Dean of Arts and Science at Queens University from 1983 to 1988.  In
two these positions, Mr. Fraser had oversight over the chief financial officer
and in one of the positions he was responsible for managing a significant
operating budget.  Mr. Fraser also is a member of the audit committee
for Aga Khan University. Mr. Fraser holds a PhD in Economics from the London
School of Economics.





Mr.
Stelzl acquired financial experience and exposure to accounting and financial
issues during his 14 years on the Executive Committee and the Investment
Committee of Colony Capital, LLC.  Mr. Stelzl holds a Bachelor of Arts
from Rice University and a Masters of Business Administration from the Harvard
Business School.




Pre-Approval Policies and
Procedures




From time
to time, Deloitte & Touche also provides us with tax and other non-audit
services and we maintain a policy regarding the provision of non-audit services
by our external auditors.  In February 2004, the Audit Committee
adopted a revised policy regarding the provision of non-audit services by our
external auditors. This policy, which is periodically reviewed and updated,
encourages consideration of whether the provision of services other than audit
services is compatible with maintaining the auditors’ independence and requires
Audit Committee pre-approval of permitted audit, audit-related and non-audit
services.  It also specifies a number of services that are not
permitted to be provided by our external auditors, including services related to
financial information systems design and implementation.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 49




External Auditor Service Fees (By
Category)




The
following table sets forth further information on the fees billed or expected to
be billed by Deloitte & Touche to BPO relating to the fiscal years ended
December 31, 2009 and 2008:




Service
      Performed
            2009(1)
            2008(2)Audit
      fees (3)
            $3,421,400
            $2,454,900Audit-related
      fees(4)
            $5,146,400
            $5,090,200All
      other fees
            -
            -Tax
      fees
            $209,100
            $430,300Total
      fees
            $8,776,900
            $7,975,400





Note:


(1)
            All
      amounts are billed in Canadian dollars and have been converted to U.S.
      dollars at the exchange rate on December 31, 2009 of
      US$1.05  for each C$1.00.


(2)
            All
      amounts are billed in Canadian dollars and have been converted to U.S.
      dollars at the exchange rate on December 31, 2008 of US$1.22 for each
      C$1.00.


(3)
            Included
      in this amount is $323,100 and nil (2008 - $185,000 and $50,000) relating
      to the audits of BPO Properties Ltd. (which is listed on the TSX) and
      First Place Tower Brookfield Properties Inc.,
  respectively.


(4)
            Included
      in this amount is $4,148,450 (2008 - $3,090,000) related to the audit of
      various BPO’ subsidiaries and $997,900 (2008 - $1,440,000) of
      non-recurring fees.





Audit fees
were for professional services rendered for the audit of our consolidated
financial statements as of and for the years ended December 31, 2009 and 2008
and the audit of internal control over financial reporting as of December 31,
2009 and 2008, quarterly review of the financial statements included in our
quarterly reports, consents and comfort letters issued and review of filings
with securities commissions.




Audit-related
fees consisted of assurance and related services that are reasonably
related to the performance of the audit and are not reported under “Audit Fees.”
Audit-related fees include employee benefit plans, operating cost and
escalation, joint venture and lender audits, as well as consultations concerning
financial accounting and reporting standards.




Tax fees
consist of services related to tax compliance, including the preparation of tax
returns and refund claims and tax planning and advice, including assistance with
property tax assessment and appeals and technical advice related to income tax
matters.




The Audit
Committee of the Board of Directors has determined that the provision of these
services is compatible with the maintenance of the independence of Deloitte
& Touche.




ADDITIONAL
INFORMATION




Additional
information including directors’ and executive officers’ remuneration and
indebtedness, the principal holders of our securities and securities authorized
for issuance under equity compensation plans is set out in our Management Proxy
Circular dated March 8, 2010.  Additional financial information is
also provided in the consolidated financial statements in our Annual Report for
the year ended December 31, 2009.  Our 2009 Annual Report also
contains, in pages 15through 71,
the Management’s Discussion and Analysis of our financial condition and results
of operations for the year ended December 31, 2009.




You may
access other information about us, including our disclosure documents, reports,
statements or other information that we file with the Canadian securities
regulatory authorities through SEDAR at www.sedar.com
and in the United States with the SEC at www.sec.gov
and on our Web site at www.brookfieldproperties.com.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 50




APPENDIX
A – SUBSIDIARIES




As of
March 12, 2010, Brookfield Properties Corporation (“Brookfield Properties”)
beneficially owned, directly or indirectly, the percentage interest of the
voting and non-voting securities of the subsidiaries listed
below.  Certain subsidiaries, each of which represent not more than
10% of the consolidated assets and not more than 10% of the consolidated
revenues of Brookfield Properties, and all of which, in the aggregate, represent
not more than 20% of the total consolidated assets and the total consolidated
revenues of Brookfield Properties at March 12, 2010, have been
omitted.  Indentation indicates the voting securities are directly or
indirectly owned by the subsidiary listed above.




Subsidiary
                                      Jurisdiction
      of Formation
                                      Percentage
      Interest
                                      
                                      Property
      (including Percentage Interest if less than 100%) /Line of
      BusinessPartnerco
      Equities Ltd.
                                      Canada
                                      100%
                                      
                                      Holding
      CompanyBrookfield
      Properties Ltd.
                                      Ontario
                                      100%
                                      
                                      Property
      Management Company, Brookfield Place, Bay-Wellington Tower,
      TorontoBrookfield
      Place (Wellington) Limited
                                      Canada
                                      100%
                                      
                                      Head
      Lease, Brookfield Place, Bay-Wellington Tower, TorontoBrookfield
      Place (Properties) Limited
                                      Canada
                                      100%
                                      
                                      Buffer
      Strip, Brookfield Place, TorontoGalleria Concourse Operations
      Inc.
                                      Ontario
                                      50%
                                      
                                      Head
      Lease, Brookfield Place, Retail and Parking, Toronto1455605
      Ontario Limited
                                      Ontario
                                      100%
                                      
                                      Ground
      Lease, Brookfield Place, Bay-Wellington Tower, TorontoCarma
      Ltd.
                                      Alberta
                                      100%
                                      
                                      General
      PartnerCarma
      Developers LP
                                      Alberta
                                      100%
                                      
                                      Land
      Development and Housing (Canada)Brookfield Properties,
      Inc.
                                      Delaware
                                      100%
                                      
                                      Holding
      CompanyCarma Inc.
                                      Delaware
                                      100%
                                      
                                      Land
      Development (US)Brookfield Properties (US)
      Inc.
                                      Delaware
                                      100%
                                      
                                      Holding
      CompanyBrookfield Commercial
      PropertiesInc.
                                      Delaware
                                      100%
                                      
                                      Holding
      CompanyBrookfield
      Properties (US) LLC
                                      Delaware
                                      100%
                                      
                                      Property
      ManagementBrookfield
      Republic Plaza LLC
                                      Delaware
                                      100%
                                      
                                      Republic
      Plaza, DenverBrookfield
      Mountain Inc.
                                      Colorado
                                      100%
                                      
                                      Capital
      Federal Block 197, Denver1201
      Louisiana Co. L.P.
                                      Delaware
                                      100%
                                      
                                      1201
      Louisiana St.MCC
      Mortgage L.P.
                                      Delaware
                                      100%
                                      
                                      33
      South 6th Street Minneapolis City
                                        Center,
      MinneapolisBrookfield
      Market Inc.
                                      Minnesota
                                      100%
                                      
                                      Gaviidae
      Common Phase I, MinneapolisDB
      Holdings, Inc./ Brookfield DB Inc.
                                      Minnesota/
                                        Minnesota
                                      100%
                                      
                                      RBC
      Plaza, Minneapolis
                                        Gaviidae
      Common Phase II, MinneapolisBrookfield
      Properties 601 South 12th
      Co. LLC
                                      Delaware
                                      100%
                                      
                                      601
      South 12th
      Street, VirginiaBrookfield
      Properties 701 South 12th
      Co. LLC
                                      Delaware
                                      100%
                                      
                                      701
      South 12th
      Street, VirginiaBrookfield
      Properties Holdings Inc.
                                      Delaware
                                      100%
                                      
                                      Holding
      CompanyBrookfield
      Financial Properties, L.P.
                                      Delaware
                                      99.4%
                                      
                                      Property
      Management and HoldingsBrookfield
      Properties One WFC Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      One
      World Financial Center, NYWFP
      Tower B Co. L.P.
                                      New
      York
                                      99.4%
                                      
                                      Two
      World Financial Center, NYBFP
      Tower C Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      Three
      World Financial Center, NY (51.47%)WFP
      Tower D Co. L.P.
                                      New
      York
                                      99.4%
                                      
                                      Four
      World Financial Center, NY (51%)WFP
      Retail Co. LP
                                      Delaware
                                      99.4%
                                      
                                      Retail
      space in Towers Two, Three and Four of World Financial
    CenterBrookfield
      Properties OLP Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      One
      Liberty Plaza, NYBFP
      245 Park Co. LLC
                                      Delaware
                                      50.7%
                                      
                                      245
      Park Avenue, NYBFP
      300 Madison II LLC
                                      Delaware
                                      99.4%
                                      
                                      300
      Madison Avenue, NYBrookfield
      Properties 53 State Fee Co. LLC./Brookfield Properties 53 State Co.
      L.P.
                                      Delaware
                                        Delaware
                                      99.4%
                                      
                                      53
      State Street, BostonBrookfield
      Properties 75 State Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      75
      State Street, BostonBFP
      1625 Eye Co. LLC
                                      Delaware
                                      9.94%
                                      
                                      1625
      Eye Street, Washington, D.C.BFP
      701 9th
      Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      701
      9th
      Street, Washington, D.C.77
      K Street Tower, LLC
                                      Delaware
                                      49.7%
                                      
                                      77
      K Street, Washington. D.C.BFP
      Potomac Tower Co. LLC
                                      Delaware
                                      99.4%
                                      
                                      Potomac
      Tower, Arlington, Virginia
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 51
  Subsidiary
                                        Jurisdiction
      of Formation
                                        Percentage
      Interest
                                        
                                        Property
      (including Percentage Interest if less than 100%) /Line of
      BusinessBattery
      Park Partners
                                        New
      York
                                        100%
                                        
                                        Holding
      CompanyBrookfield
      Properties W. 33rd
      Co. L.P.
                                        Delaware
                                        100%
                                        
                                        West
      33rd
      9th
      Avenue, NYBattery
      Park Partners
                                        New
      York
                                        100%
                                        
                                        Holding
      CompanyWest
      31st
      Street Inc.
                                        Delaware
                                        100%
                                        
                                        West
      31st
      9th
      Avenue, NYBrookfield
      FMS Ltd.
                                        Alberta
                                        100%
                                        
                                        Holding
      CompanyBrookfield
      LePage Johnson Controls
                                          Facility
      Management Services  LP
                                        Ontario
                                        40%
                                        
                                        Facilities
      Management1043513
      Alberta Ltd.
                                        Alberta
                                        100%
                                        
                                        Holding
      CompanyBPO
      Properties Ltd.
                                        Canada
                                        89%
                                        
                                        Holding
      Company70 York Street
      Limited
                                        Ontario
                                        89%
                                        
                                        HSBC
      Building Ground Lease, 70 York Street, TorontoExchange Tower
      Limited
                                        Ontario
                                        89%
                                        
                                        Bay-Adelaide
      Centre, Toronto (50%)Brookfield Properties(ET)
      Ltd.
                                          1211460 Ontario
      Limited
                                        Ontario
                                          Ontario
                                        89%
                                          89%
                                        }
                                        Exchange
      Tower & Lands, Toronto (50%)1262004
      Ontario Limited
                                          1452917
      Ontario Limited
                                        Ontario
                                          Ontario
                                        89%

                                          89%
                                        
                                        Queen’s
      Quay Terminal & Lands, Toronto1450779
      Ontario Limited
                                        Ontario
                                        89%
                                        
                                        20-22
      Front Street E., Toronto1464255
      Ontario Limited
                                        Ontario
                                        89%
                                        
                                        Hudson’s
      Bay Centre, Toronto (25%)1523605
      Ontario Limited
                                        Ontario
                                        89%
                                        
                                        105
      Adelaide Street West, Toronto3744469 Canada
      Inc.
                                          3945863 Canada
      Inc.
                                        Canada
                                          Canada
                                        89%
                                          89%
                                        }
                                        Royal
      Centre & Lands, Vancouver4087844 Canada
      Inc.
                                        Alberta
                                        44.5%
                                        
                                        Bankers
      Hall Leasehold, CalgaryBHC Club Ltd.
                                        Alberta
                                        89%
                                        
                                        Bankers
      Hall Fitness Club, Calgary (50%)4087861 Canada
      Inc.
                                        Alberta
                                        44.5%
                                        
                                        Royal
      Bank Building Leasehold, CalgaryPCC Properties (Calgary)
      Ltd.
                                        Alberta
                                        89%
                                        
                                        Suncor
      Energy Centre, Calgary (50%)Fifth
      Avenue Place(Alberta) Ltd.
                                        Alberta
                                        89%
                                        
                                        Fifth
      Avenue Place, Calgary (50%)Brookfield
      Properties Management Corporation
                                        Canada
                                        89%
                                        
                                        Property
      Management CompanyBPO
      Real Estate Corporation
                                        Alberta
                                        89%
                                        
                                        Holding
      CompanyBPO Value Add
      Trust
                                        Alberta
                                        89%
                                        
                                        Altius
      Centre, Calgary (25%)
                                          Canadian
      Western Bank Place, Edmonton (25%)
                                          Enbridge
      Tower, Edmonton (25%)BPO Core Trust
                                        Alberta
                                        89%
                                        
                                        Place
      de Ville I, Ottawa (25%)
                                          Place
      de Ville II, Ottawa (25%)
                                          Place
      de Ville III, Ottawa (25%)
                                          Jean
      Edmonds Tower, Ottawa (25%)
                                          2
      Queen Street East, Toronto (25%)
                                          Yonge/Richmond
      Centre, Toronto (25%)1445750 Ontario
      Inc.
                                        Ontario
                                        89%
                                        
                                        Holding
      Company2072790 Ontario
      Inc.
                                        Ontario
                                        22.25%
                                        
                                        Holding
      CompanyFirst Place Tower Brookfield
      Properties Inc.
                                        Ontario
                                        22.25%
                                        
                                        First
      Canadian Place, Toronto
                                          Leasehold
      (100%) and Freehold (50%)Brookfield
      Properties(PI) Inc.
                                        Ontario
                                        22.25%
                                        
                                        Management
      CompanyBPO GP Ltd.
                                        Alberta
                                        89%
                                        
                                        Holding
      CompanyBPO
      Bloor Yonge GP Ltd.
                                        Canada
                                        89%
                                        
                                        General
      PartnerBPO
      Properties BloorYonge LP
                                        Ontario
                                        89%
                                        
                                        Hudson’s
      Bay Centre, Toronto (75%)BPO
      GP Trust
                                        Alberta
                                        89%
                                        
                                        General
      PartnerBPO
      Properties Bay Adelaide LP
                                        Ontario
                                        89%
                                        
                                        Bay-Adelaide
      Centre, Toronto (50%)BPO
      Properties 74 York LP
                                        Ontario
                                        89%
                                        
                                        74
      York Street, Toronto (50%)
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 52
  Subsidiary
                                        Jurisdiction
      of Formation
                                        Percentage
      Interest
                                        
                                        Property
      (including Percentage Interest if less than 100%) /Line of
      BusinessBPO
      Properties 76 York LP
                                        Ontario
                                        89%
                                        
                                        76
      York Street, Toronto (50%)BPO
      Properties Yonge Adelaide LP
                                        Ontario
                                        89%
                                        
                                        Yonge
      Adelaide, TorontoBPO
      Properties CHS LP
                                          6640982
      Canada Inc.
                                        Alberta
                                          Canada
                                        89%
                                          89%
                                        }
                                        Calgary
      Herald Site, CalgaryBPO
      Properties Bankers Court LP
                                        Alberta
                                        89%
                                        
                                        Bankers
      Court, Calgary (50%)Brookfield
      Homes Holdings Ltd.
                                        Ontario
                                        100%
                                        
                                        Holding
      CompanyBrookfield
      Homes (Ontario) Limited
                                        Ontario
                                        100%
                                        
                                        Land
      Development and Housing (Ontario)Brookfield
      Properties Services Ltd.
                                        Canada
                                        100%
                                        
                                        Office
      Services CompanyBrookfield
      Residential Services Ltd.
                                        Ontario
                                        80%
                                        
                                        Condominium
      Management CompanyBrookfield
      Properties Management LLC
                                        Delaware
                                        100%
                                        
                                        Property
      ManagementTRZ
      Holdings IV LLC
                                        Delaware
                                        46.55%
                                        
                                        Holding
      CompanyOne
      NY Plaza Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        One
      New York Plaza, NYNewport
      Tower Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Newport
      Tower 525 Washington Blvd., Jersey City1114
      6th
      Avenue Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        1114
      Avenue of the Americas (Grace Building), NY (49.9%)1411
      TrizecHahn Swig, L.L.C.
                                        Delaware
                                        46.55%
                                        
                                        1411
      Broadway (World Apparel Center), NY (49.9%)1460
      Fee TrizecHahn – Swig, L.L.C.
                                          1460
      Leasehold TrizecHahn – Swig, L.L.C.
                                        Delaware
                                        46.55%
                                          46.55%
                                        }
                                        1460
      Broadway, NY (99.8%)TrizecHahn
      1065 Avenue of the Americas LLC
                                        Delaware
                                        46.55%
                                        
                                        1065
      Avenue of the Americas, NY (99%)1250C/2401P
      Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        2401
      Pennsylvania Avenue, Washington, D.C.
                                          1250
      Connecticut Avenue, Washington, D.C.1200
      K Street II Co. LLC
                                          1200
      K Street I Co. LLC
                                        Delaware
      Delaware
                                        46.55%
                                          46.55%
                                        }
                                        1200
      K Street, N.W., Washington, D.C.2000
      L Co. LLC
                                        District
      of Columbia
                                        46.55%
                                        
                                        2000
      L Street, N.W., Washington, D.C.1400
      K Co. LLC
                                          1400
      K Fee LLC
                                        District
      of Columbia/
                                          District
      of Columbia
                                        46.55%
                                          
                                          46.55%
                                        }
                                        1400
      K Street, N.W., Washington, D.C.1250
      23rd
      Street Co. LLC
                                        District
      of Columbia
                                        46.55%
                                        
                                        1250
      23rd
      Street, N.W., Washington, D.C.1225
      Connecticut Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        1225
      Connecticut Avenue, N.W., Washington, D.C.2001
      M Co. LLC
                                        Delaware
                                        44.33%
                                        
                                        2001
      M Street, N.W., Washington, D.C. (49.5%)750
      Ninth Street, LLC
                                        Delaware
                                        22.57%
                                        
                                        Victor
      Building, Washington, D.C.Bethesda
      Crescent (Wisconsin) Co. L.P.
                                        Maryland
                                        46.55%
                                        
                                        Bethesda
      Crescent 7401 & 7475 Wisconsin Avenue, BethesdaBethesda
      Crescent (4600) Co. L.P.
                                        Maryland
                                        46.55%
                                        
                                        Bethesda
      4600 East-West Highway, BethesdaTwo
      Reston Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Reston
      Unisys Building Two Reston Crescent, VAOne
      Reston Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        One
      Reston Crescent, VA1550
      and 1560 Wilson Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        1550
      & 1560 Wilson Blvd., Rosslyn, VASilver
      SM Co. LLC
                                        Maryland
                                        46.55%
                                        
                                        Silver
      Spring Metro Plaza, Montgomery, MDTwo
      Ballston Plaza Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Two
      Ballston Plaza, Arlington, VALS
      111 West Ocean Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Landmark
      Square, Long Beach, CA333
      South Hope Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Bank
      of America Plaza 333 S. Hope St., Los Angeles601
      Figueroa Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        Figueroa
      at Wilshire, Los AngelesMarina
      Airport Building Ltd.
                                        California
                                        46.55%
                                        
                                        Marina
      Towers (North and South), Marina del Rey, CA (50%)EYP
      Realty, LLC
                                        
                                        46.55%
                                        
                                        Ernst
      & Young Plaza and 7+FIG, Los AngelesTrizec
      9665 Wilshire, LLC
                                        Delaware
                                        46.55%
                                        
                                        9665
      Wilshire Blvd., Los AngelesTrizec
      6080 HHC, LLC
                                        Delaware
                                        46.55%
                                        
                                        HHC
      6080 Center Drive, Los AngelesTrizec
      Northpoint Tower, LLC
                                        Delaware
                                        46.55%
                                        
                                        HHC
      Northpoint 6601 Center Drive W., Los AngelesTrizec
      5670 Wilshire, LLC
                                        Delaware
                                        46.55%
                                        
                                        5670
      Wilshire Boulevard, Los AngelesTrizec
      HHC Spectrum, LLC
                                        Delaware
                                        46.55%
                                        
                                        Howard
      Hughes Center – Spectrum Center, Los AngelesTrizec
      6060 HHC, LLC
                                        Delaware
                                        46.55%
                                        
                                        HHC
      6060 Center Drive, Los AngelesTrizec
      6100 HHC, LLC
                                        Delaware
                                        46.55%
                                        
                                        HHC
      6100 Center Drive, Los AngelesTrizec
      West LA Tower, LLC
                                        Delaware
                                        46.55%
                                        
                                        HHC
      HH Tower 6701 Center Drive West, Los AngelesTrizec
      Westwood Center, LLC
                                        Delaware
                                        46.55%
                                        
                                        Westwood
      Center 110 Glendon Avenue, Los AngelesTrizec
      Wilshire Center, LLC
                                        Delaware
                                        46.55%
                                        
                                        World
      Savings Center 11601 Wilshire Blvd., Los AngelesTrizec
      701 B Street, LLC
                                        Delaware
                                        46.55%
                                        
                                        701
      B Street, San Diego
  Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 53
  Subsidiary
                                        Jurisdiction
      of Formation
                                        Percentage
      Interest
                                        
                                        Property
      (including Percentage Interest if less than 100%) /Line of
      BusinessTrizec
      707 Broadway, LLC
                                        Delaware
                                        46.55%
                                        
                                        707
      Broadway, San DiegoTrizec
      Sorrento Towers, LLC
                                        Delaware
                                        46.55%
                                        
                                        Sorrento
      Retail, 9450 Scranton Road, San Diego, Sorrento Towers North 5355 – 5375
      Mira Sorrento Place, San Diego, Sorrento Towers South 9276 and 9330
      Scranton Road Corporate Center, San DiegoDresser
      – Cullen Venture
                                        Texas
                                        
                                        
                                        KBR
      Tower 601 Jefferson, Houston, TX (50%)Cullen
      500 Jefferson Co. L.P.
                                        Delaware
                                        
                                        
                                        500
      Jefferson, HoustonCullen
      Allen Holdings, L.P.
                                        Delaware
                                        46.55%
                                        
                                        Continental
      Center I 1600 Smith Street, Houston
                                          One,
      Two and Three Allen Center, HoustonFour
      Allen Center Co. LLC
                                        Delaware
                                        46.55%
                                        
                                        1400
      Smith Street, HoustonCullen
      Continental II Co. L.P.
                                        Delaware
                                        46.55%
                                        
                                        Continental
      Center II 600 Jefferson,
Houston





Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 54




APPENDIX
B - COMMERCIAL PROPERTIES BY REGION




(SQUARE
      FEET IN 000S)
              (SQUARE
      FEET IN 000S)
              
              BROOKFIELD
                PROPERTIES
              OTHER
              BROOKFIELD
                PROPERTIESNUMBER
      OF PROPERTIES
              LEASED
      %
              OFFICE
              RETAIL
              TOTAL LEASABLE
              PARKING
              TOTAL
      AREA
              OWNED
      INTEREST %
              OWNED INTEREST(1)
              SHAREHOLDERS’
                INTEREST
              NET OWNED INTERESTDIRECTNew
      YorkWorld
      Financial CenterOne
              1
              99.4
              1,603
              52
              1,655
              58
              1,713
              100
              1,713
              (10)
              1,703Two
              1
              100.0
              2,671
              35
              2,706
              —
              2,706
              100
              2,706
              (16)
              2,690Three
              1
              95.3
              1,254
              —
              1,254
              53
              1,307
              100
              1,307
              (8)
              1,299Four
              1
              100.0
              1,861
              43
              1,904
              48
              1,952
              51
              996
              (6)
              990Retail
              
              80.3
              —
              168
              168
              122
              290
              100
              290
              (2)
              288One
      Liberty Plaza
              1
              99.5
              2,327
              20
              2,347
              —
              2,347
              100
              2,347
              (14)
              2,333245
      Park Avenue
              1
              94.0
              1,719
              68
              1,787
              —
              1,787
              51
              911
              (5)
              906300
      Madison Avenue
              1
              100.0
              1,089
              5
              1,094
              —
              1,094
              100
              1,094
              (6)
              1,0887
              98.3
              12,524
              391
              12,915
              281
              13,196
              
              11,364
              (67)
              11,297Boston53
      State Street
              1
              88.6
              1,164
              30
              1,194
              41
              1,235
              100
              1,235
              (8)
              1,22775
      State Street
              1
              85.3
              771
              25
              796
              235
              1,031
              100
              1,031
              (6)
              1,0252
              87.3
              1,935
              55
              1,990
              276
              2,266
              
              2,266
              (14)
              2,252Washington,
      D.C.1625
      Eye Street
              1
              100.0
              370
              16
              386
              185
              571
              10
              57
              —
              5777 K
      Street
              1
              52.0
              307
              19
              326
              —
              326
              50
              163
              (1)
              162701
      9th Street
              1
              100.0
              340
              24
              364
              183
              547
              100
              547
              (3)
              544Potomac
      Tower
              1
              100.0
              238
              —
              238
              203
              441
              100
              441
              (3)
              438601
      South 12th Street
              1
              100.0
              309
              —
              309
              —
              309
              100
              309
              —
              309701
      South 12th Street
              1
              100.0
              253
              —
              253
              —
              253
              100
              253
              —
              2536
              91.7
              1,817
              59
              1,876
              571
              2,447
              
              1,770
              (7)
              1,763Houston1201
      Louisiana Street
              1
              93.3
              836
              8
              844
              48
              892
              100
              892
              —
              8921
              93.3
              836
              8
              844
              48
              892
              
              892
              —
              892DenverRepublic
      Plaza
              1
              95.4
              1,276
              51
              1,327
              503
              1,830
              100
              1,830
              —
              1,8301
              95.4
              1,276
              51
              1,327
              503
              1,830
              
              1,830
              —
              1,830Minneapolis33
      South Sixth Street
              2
              91.8
              1,108
              370
              1,478
              325
              1,803
              100
              1,803
              —
              1,803RBC
      Plaza
              2
              92.6
              610
              442
              1,052
              196
              1,248
              100
              1,248
              —
              1,2484
              92.1
              1,718
              812
              2,530
              521
              3,051
              
              3,051
              —
              3,051Direct
      U.S. Properties
              21
              95.6
              20,106
              1,376
              21,482
              2,200
              23,682
              
              21,173
              (88)
              21,085TorontoBrookfield
      PlaceBay
      Wellington Tower
              1
              99.0
              1,299
              41
              1,340
              —
              1,340
              100
              1,340
              —
              1,340Retail
      and Parking
              1
              97.9
              —
              53
              53
              690
              743
              70
              520
              —
              52022
      Front Street
              1
              100.0
              136
              8
              144
              —
              144
              100
              144
              (15)
              129Exchange
      Tower
              1
              98.6
              963
              66
              1,029
              131
              1,160
              50
              580
              (64)
              516105
      Adelaide
              1
              99.5
              176
              7
              183
              49
              232
              100
              232
              (25)
              207Hudson’s
      Bay Centre
              1
              97.4
              536
              261
              797
              295
              1,092
              100
              1,092
              (121)
              971Queen’s
      Quay Terminal
              1
              98.5
              429
              75
              504
              —
              504
              100
              504
              (56)
              448HSBC
      Building
              1
              100.0
              188
              6
              194
              31
              225
              100
              225
              (25)
              2008
              98.6
              3,727
              517
              4,244
              1,196
              5,440
              
              4,637
              (306)
              4,331CalgaryBankers
      Hall
              3
              99.9
              1,944
              224
              2,168
              409
              2,577
              50
              1,289
              (142)
              1,147Bankers
      Court
              1
              100.0
              255
              7
              262
              62
              324
              50
              162
              (18)
              144Suncor
      Energy Centre
              2
              100.0
              1,710
              22
              1,732
              220
              1,952
              50
              976
              (107)
              869Fifth
      Avenue Place
              2
              99.5
              1,428
              47
              1,475
              206
              1,681
              50
              841
              (93)
              7488
              99.8
              5,337
              300
              5,637
              897
              6,534
              
              3,268
              (360)
              2,908VancouverRoyal
      Centre
              1
              94.1
              494
              95
              589
              264
              853
              100
              853
              (94)
              7591
              94.1
              494
              95
              589
              264
              853
              
              853
              (94)
              759OtherOther
              1
              96.2
              70
              3
              73
              —
              73
              100
              73
              —
              731
              96.2
              70
              3
              73
              —
              73
              
              73
              —
              73Direct
      Canadian Properties
              18
              99.0
              9,628
              915
              10,543
              2,357
              12,900
              
              8,831
              (760)
              8,071TOTAL
      DIRECT
              39
              96.7
              29,734
              2,291
              32,025
              4,557
              36,582
              
              30,004
              (848)
              29,156




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 55




(SQUARE
      FEET IN 000S)
                BROOKFIELD
                  PROPERTIES
                OTHER
                BROOKFIELD
                  PROPERTIESNUMBER
      OF PROPERTIES
                LEASED
      %
                OFFICE
                RETAIL
                TOTAL LEASABLE
                PARKING
                TOTAL
      AREA
                OWNED
      INTEREST %
                OWNED INTEREST(1)
                SHAREHOLDERS’
                  INTEREST
                NET OWNED INTERESTU.S.
      FUNDManaged
      PropertiesNew
      YorkThe
      Grace Building
                1
                93.8
                1,537
                20
                1,557
                —
                1,557
                49.9
                777
                (416)
                361One
      New York Plaza
                1
                99.2
                2,554
                31
                2,585
                —
                2,585
                100
                2,585
                (1,383)
                1,202Newport
      Tower
                1
                91.2
                1,059
                41
                1,100
                —
                1,100
                100
                1,100
                (589)
                5113
                95.9
                5,150
                92
                5,242
                —
                5,242
                
                4,462
                (2,388)
                2,074Washington,
      D.C.1200
      K Street
                1
                99.5
                366
                24
                390
                44
                434
                100
                434
                (232)
                2021250
      23rd Street
                1
                41.9
                128
                —
                128
                16
                144
                100
                144
                (77)
                671250
      Connecticut Avenue
                1
                79.2
                163
                21
                184
                26
                210
                100
                210
                (113)
                971400
      K Street
                1
                95.6
                178
                12
                190
                34
                224
                100
                224
                (120)
                1042000
      L Street
                1
                86.4
                308
                75
                383
                —
                383
                100
                383
                (205)
                1782001
      M Street
                1
                99.6
                190
                39
                229
                35
                264
                98
                259
                (139)
                1202401
      Pennsylvania Avenue
                1
                91.3
                58
                19
                77
                16
                93
                100
                93
                (50)
                43Bethesda
      Crescent
                3
                88.9
                241
                27
                268
                68
                336
                100
                336
                (180)
                156One
      Reston Crescent
                1
                100.0
                185
                —
                185
                —
                185
                100
                185
                (99)
                86Silver
      Spring Metro Plaza
                3
                83.8
                640
                47
                687
                84
                771
                100
                771
                (413)
                358Sunrise
      Tech Park
                4
                95.8
                315
                1
                316
                —
                316
                100
                316
                (169)
                147Two
      Reston Crescent
                1
                96.3
                182
                3
                185
                —
                185
                100
                185
                (99)
                86Two
      Ballston Plaza
                1
                97.5
                204
                19
                223
                —
                223
                100
                223
                (119)
                104Victor
      Building
                1
                81.7
                302
                45
                347
                —
                347
                49.9
                173
                (92)
                811550
      & 1560 Wilson Blvd
                2
                99.6
                248
                35
                283
                76
                359
                100
                359
                (192)
                16723
                89.8
                3,708
                367
                4,075
                399
                4,474
                
                4,295
                (2,299)
                1,996Los
      Angeles601
      Figueroa
                1
                77.0
                1,037
                2
                1,039
                123
                1,162
                100
                1,162
                (622)
                540Bank
      of America Plaza
                1
                94.8
                1,383
                39
                1,422
                343
                1,765
                100
                1,765
                (944)
                821Ernst
      & Young Tower
                1
                73.1
                910
                335
                1,245
                391
                1,636
                100
                1,636
                (875)
                761Landmark
      Square
                1
                91.7
                420
                23
                443
                212
                655
                100
                655
                (350)
                305Marina
      Towers
                2
                87.9
                356
                25
                381
                87
                468
                50
                234
                (125)
                1096
                83.9
                4,106
                424
                4,530
                1,156
                5,686
                
                5,452
                (2,916)
                2,536HoustonAllen
      CenterOne
      Allen Center
                1
                98.2
                914
                79
                993
                —
                993
                100
                993
                (531)
                462Two
      Allen Center
                1
                98.5
                987
                9
                996
                —
                996
                100
                996
                (533)
                463Three
      Allen Center
                1
                92.8
                1,173
                22
                1,195
                —
                1,195
                100
                1,195
                (639)
                5561400
      Smith Street
                1
                100.0
                1,229
                38
                1,267
                —
                1,267
                100
                1,267
                (678)
                589Cullen
      CenterContinental
      Center I
                1
                95.0
                1,048
                50
                1,098
                411
                1,509
                100
                1,509
                (807)
                702Continental
      Center II
                1
                85.6
                428
                21
                449
                81
                530
                100
                530
                (284)
                246KBR
      Tower
                1
                80.5
                985
                63
                1,048
                254
                1,302
                50
                651
                (348)
                303500
      Jefferson Street
                1
                95.4
                351
                39
                390
                44
                434
                100
                434
                (232)
                2028
                93.8
                7,115
                321
                7,436
                790
                8,226
                
                7,575
                (4,052)
                3,523U.S.
      Fund - Managed
                40
                91.5
                20,079
                1,204
                21,283
                2,345
                23,628
                
                21,784
                (11,655)
                10,129Non-Managed
      PropertiesNew
      York1065
      Avenue of the Americas
                1
                82.5
                642
                40
                682
                —
                682
                99
                675
                (361)
                3141411
      Broadway
                1
                75.7
                1,149
                38
                1,187
                36
                1,223
                49.9
                610
                (326)
                2841460
      Broadway
                1
                99.1
                211
                9
                220
                —
                220
                49.9
                110
                (59)
                513
                80.4
                2,002
                87
                2,089
                36
                2,125
                
                1,395
                (746)
                649Los
      Angeles5670
      Wilshire Center
                1
                71.2
                426
                19
                445
                —
                445
                100
                445
                (238)
                2076060
      Center Drive
                1
                89.2
                253
                15
                268
                113
                381
                100
                381
                (204)
                1776080
      Center Drive
                1
                96.9
                316
                —
                316
                163
                479
                100
                479
                (256)
                2236100
      Center Drive
                1
                84.1
                294
                —
                294
                168
                462
                100
                462
                (247)
                215701
      B Street
                1
                83.6
                523
                37
                560
                —
                560
                100
                560
                (299)
                261707
      Broadway
                1
                70.1
                187
                —
                187
                128
                315
                100
                315
                (168)
                1479665
      Wilshire Blvd
                1
                89.4
                171
                —
                171
                64
                235
                100
                235
                (127)
                108Howard
      Hughes Spectrum
                1
                100.0
                37
                —
                37
                —
                37
                100
                37
                (20)
                17Howard
      Hughes Tower
                1
                70.8
                334
                2
                336
                141
                477
                100
                477
                (255)
                222Northpoint
                1
                75.9
                105
                —
                105
                45
                150
                100
                150
                (80)
                70Arden
      Towers at Sorrento
                4
                87.1
                564
                54
                618
                —
                618
                100
                618
                (330)
                288Westwood
      Center
                1
                88.1
                304
                25
                329
                —
                329
                100
                329
                (176)
                153Wachovia
      Center
                1
                88.4
                486
                14
                500
                161
                661
                100
                661
                (353)
                30816
                83.7
                4,000
                166
                4,166
                983
                5,149
                
                5,149
                (2,753)
                2,396U.S.
      Fund – Non-Managed
                19
                82.6
                6,002
                253
                6,255
                1,019
                7,274
                
                6,544
                (3,499)
                3,045TOTAL
      U.S. FUND
                59
                89.4
                26,081
                1,457
                27,538
                3,364
                30,902
                
                28,328
                (15,154)
                13,174




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 56




(SQUARE
      FEET IN 000S)
                                
                                BROOKFIELD
                                  PROPERTIES
                                OTHER
                                BROOKFIELD
                                  PROPERTIESNUMBER
      OF PROPERTIES
                                LEASED
      %
                                OFFICE
                                RETAIL
                                TOTAL LEASABLE
                                PARKING
                                TOTAL
      AREA
                                OWNED
      INTEREST %
                                OWNEDINTEREST(1)
                                SHAREHOLDERS’
                                  INTEREST
                                NET OWNED INTERESTCANADIAN
      FUNDTorontoFirst
      Canadian Place
                                1
                                96.1
                                2,379
                                232
                                2,611
                                170
                                2,781
                                25
                                695
                                (76)
                                619151
      Yonge Street
                                1
                                97.8
                                289
                                10
                                299
                                72
                                371
                                25
                                93
                                (10)
                                832
      Queen Street East
                                1
                                98.6
                                448
                                16
                                464
                                81
                                545
                                25
                                136
                                (15)
                                1213
                                96.6
                                3,116
                                258
                                3,374
                                323
                                3,697
                                
                                924
                                (101)
                                823CalgaryAltius
      Centre
                                1
                                99.4
                                303
                                3
                                306
                                72
                                378
                                25
                                95
                                (11)
                                841
                                99.4
                                303
                                3
                                306
                                72
                                378
                                
                                95
                                (11)
                                84OttawaPlace
      de Ville I
                                2
                                99.8
                                569
                                14
                                583
                                502
                                1,085
                                25
                                271
                                (30)
                                241Place
      de Ville II
                                2
                                100.0
                                598
                                12
                                610
                                433
                                1,043
                                25
                                261
                                (29)
                                232Jean
      Edmonds Towers
                                2
                                100.0
                                541
                                13
                                554
                                95
                                649
                                25
                                162
                                (18)
                                1446
                                99.9
                                1,708
                                39
                                1,747
                                1,030
                                2,777
                                
                                694
                                (77)
                                617EdmontonCanadian
      Western Bank
                                1
                                98.2
                                371
                                36
                                407
                                91
                                498
                                25
                                125
                                (14)
                                111Enbridge
      Tower
                                1
                                100.0
                                184
                                —
                                184
                                30
                                214
                                25
                                54
                                (7)
                                472
                                98.8
                                555
                                36
                                591
                                121
                                712
                                
                                179
                                (21)
                                158TOTAL
      CANADIAN FUND
                                12
                                97.9
                                5,682
                                336
                                6,018
                                1,546
                                7,564
                                
                                1,892
                                (210)
                                1,682TOTAL
      PROPERTIES
                                110
                                93.8
                                61,497
                                4,084
                                65,581
                                9,467
                                75,048
                                
                                60,224
                                (16,212)
                                44,012Development
      and Redevelopment
                                —
                                —
                                15,353
                                —
                                15,353
                                —
                                15,353
                                
                                14,427
                                (2,202)
                                12,225TOTAL
      PORTFOLIO
                                110
                                93.8
                                76,850
                                4,084
                                80,934
                                9,467
                                90,401
                                
                                74,651
                                (18,414)
                                56,237TOTAL
      EXCLUDING
                                  NON-MANAGED
                                91
                                95.0
                                70,848
                                3,831
                                74,679
                                8,448
                                83,127
                                
                                68,107
                                (14,915)
                                53,192




(1)Represents
the company’s consolidated interest before non-controlling
interests




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 57




APPENDIX
C - SUMMARY OF TERMS AND CONDITIONS OF AUTHORIZED SECURITIES




Class A
Preference Shares




Provisions
of Class A Preference Shares




Issuance
in Series




The
Class A preference shares consist of two series only, Series A and
Series B, and no other series may be designated. Each of the series of
the Class A preference shares are subject to the Class provisions of the
Class A preference shares. Pursuant to the Canada Business Corporations
Act, each series of Class A preference shares participates rateably
with every other series of Class A preference shares in respect of
accumulated dividends and return of capital.




Dividends




The
holders of Class A preference shares are entitled to receive, as and when
declared by the directors of Brookfield Properties, cumulative preferential
dividends payable in half-yearly installments on March 15 and
September 15 in each year to shareholders of record on March 1 and
September 1, respectively. Accrued and unpaid dividends are paid in
priority to dividends on any other shares of Brookfield Properties, and no
dividends are declared or paid or set apart for any such other shares unless all
accrued cumulative dividends on all Class A preference shares then issued
and outstanding have been declared and paid or provided for at the date of such
declaration or payment or setting apart.




Redemption




The
Corporation may redeem all, or from time to time any part, of the outstanding
Class A preference shares on payment to the holders thereof, for each share
to be redeemed of an amount equal to C$1.11111 per share together with all
accrued and unpaid cumulative dividends thereon.  Notice of redemption
must be given by Brookfield Properties at least 30 days before the date
specified for redemption.




Repurchase




The
Corporation may at any time, and from time to time, purchase the whole or any
part of the Class A preference shares outstanding in the open market or by
invitation for tenders to all holders of record of the Class A preference
shares outstanding, in accordance with the procedures set out in the share
conditions for the Class A preference shares as a class. The Corporation
has undertaken to purchase or cause to be purchased (if obtainable) in the open
market 40,000 Class A preference shares in each fiscal year at a price of
C$1.11111 per share, together with costs of purchase and all accrued and unpaid
cumulative dividends.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
other distribution of its assets among shareholders by way of return of capital,
the holders of the Class A preference shares are entitled to receive an
amount equal to C$1.11111 per share, together with all accrued and unpaid
cumulative dividends in priority to any distribution to the holders of Common
Shares or any shares of any other class ranking junior to the Class A
preference shares, including the Class AA and Class AAA preference
shares and such holders are not entitled to share any further in the
distribution of the property or assets of Brookfield Properties.




Voting




The
holders of Class A preference shares are entitled to receive notice of and
to attend all shareholders’ meetings and for all purposes shall be entitled to
one vote for each Class A preference share held, except in respect of the
election of directors, where cumulative voting will apply in the same manner as
for the Common Shares.




Specific
Provisions of Class A Preference Shares, Series A




Dividends




The
holders of Class A preference shares, Series A, are each entitled to
receive fixed preferential cumulative cash dividends at the rate of 71/2% per annum
on the amount paid thereon.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 58




Specific
Provisions of Class A Preference Shares, Series B




Dividends




The
holders of Class A preference shares, Series B, are each entitled to
receive fixed preferential cumulative cash dividends at the rate of 71/2% per annum
on the amount paid thereon.




Class AA
Preference Shares




Provisions
of Class AA Preference Shares




Issuance
in Series




The
Class AA preference shares may be issued at any time, or from time to time,
in one or more series. The board of directors of Brookfield Properties will fix
the provisions attached to each series from time to time before issuance. Each
of the series of the Class AA preference shares are subject to the
provisions of the Class AA preference shares.




Priority




The
preferences, priorities and rights attaching to the Class AA preference
shares are subject and subordinate to those attaching to the Class A
preference shares. The Class AA preference shares of each series rank on a
parity with the Class AA preference shares of every other series with
respect to priority in payment of dividends and in the distribution of assets in
the event of liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of the assets of Brookfield Properties among its
shareholders for the purpose of winding up its affairs. Furthermore, pursuant to
the Canada Business
Corporations Act, each series of Class AA preference shares
participates ratably with every other series of Class AA preference shares
in respect of accumulated dividends and return of capital.




Redemption




Subject
to the terms of the Class A preference shares and to the provisions
relating to any particular series of Class AA preference shares, Brookfield
Properties may redeem outstanding Class AA preference shares, at a
redemption price for each of the Class AA preference shares so redeemed as
may have been fixed for that purpose in respect of each series prior to the sale
and allotment of any Class AA preference shares of that series, plus an
amount equal to all accrued but unpaid preferential dividends. Notice of
redemption must be given by Brookfield Properties at least 30 days before
the date specified for redemption.




Repurchase




Subject
to the terms of the Class A preference shares and to the provisions
relating to any particular series of Class AA preference shares, Brookfield
Properties may at any time and from time to time purchase the whole or any part
of the Class AA preference shares outstanding in the open market or by
invitation for tenders to all holders of record of the Class AA preference
shares outstanding, in accordance with the procedures set out in the share
conditions for the Class AA preference shares as a class.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among shareholders for
the purpose of winding up its affairs, the holders of the Class AA
preference shares are, subject to the terms of the Class A preference
shares, entitled to receive the amount paid on such shares, together with all
accrued and unpaid dividends in priority to any distribution to the holders of
Common Shares or any shares of any other Class ranking junior to the
Class AA preference shares, including the Class AAA preference shares,
and such holder is not entitled to share any further in the distribution of the
property and assets of Brookfield Properties.




Dividends




The
holders of Class AA preference shares are each entitled to receive, as and
when declared by the directors of Brookfield Properties, fixed cumulative
preferential cash dividends.




Voting




Subject
to applicable corporate law, the holders of the Class AA preference shares
are not entitled to receive notice of, to attend or to vote at any meeting of
shareholders of Brookfield Properties, unless and until Brookfield Properties
from time to time has failed to pay in the aggregate, eight quarterly dividends
on any one series of Class AA preference shares and then only as long as
such dividends remain in arrears, in which case the holders of Class AA
preference shares will be entitled to receive notice of and to attend all
meetings of shareholders of Brookfield Properties and are entitled to one vote
for every Class AA preference share held.




Brookfield
| Brookfield Properties Corporation | 2010 Annual Information Form
 59




Specific
Provisions of the Class AA Preference Shares,
Series E




Dividends




Subject
to the prior rights of holders of the Class A preference shares and any
other shares ranking senior to the Class AA preference shares, the holders
of the Class AA preference shares, Series E (the “Class AA,
Series E Shares”) are each entitled to receive, as and when declared by the
directors of Brookfield Properties, cumulative preferential cash dividends in an
amount per share per annum equal to 70% of the “Average Prime Rate” (as defined
in the share conditions for the Class AA, Series E Shares), payable
quarterly on the last day of each of the months of March, June, September and
December, as and when declared by the board of directors of Brookfield
Properties.




Redemption




The
Corporation may redeem at any time all, or from time to time any part, of the
then outstanding Class AA, Series E Shares, on payment for each share
to be redeemed of an amount equal to C$25.00 per share, together with all
accrued and unpaid dividends thereon up to the date fixed for redemption. Notice
of redemption must be given by Brookfield Properties not less than 30 days
and not more than 60 days before the date specified for
redemption.




Purchase
for Cancellation




The
Corporation may at any time, or from time to time, purchase for cancellation all
or any part of the outstanding Class AA, Series E Shares in the open
market or by invitation for tenders to all holders of record of the
Class AA, Series E Shares in accordance with the procedures set out in
the share conditions for the Class AA, Series E Shares.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
in the event of any other distribution of assets of Brookfield Properties among
its shareholders for the purpose of winding up its affairs, the holders of
Class AA, Series E Shares are entitled to receive an amount equal to
C$25.00 per share, plus an amount equal to all accrued and unpaid dividends
thereon up to the date of payment, before any amount can be paid or assets of
Brookfield Properties distributed to the holders of any other shares of
Brookfield Properties ranking as to capital junior to the Class AA,
Series E Shares. After such payment, the holders of the Class AA,
Series E Shares are not entitled to share in any further distribution of
the assets of Brookfield Properties.




Voting




Subject
to applicable corporate law and the provisions attaching to the Class AA
preference shares as a class, the holders of Class AA, Series E Shares
are not entitled to receive notice of, to attend or to vote at, any meetings of
shareholders of Brookfield Properties.




Class AAA
Preference Shares




Provisions
of Class AAA Preference Shares




Issuance
in Series




The
directors may from time to time issue Class AAA preference shares in one or
more series, each series to consist of such number of shares as will before
issuance thereof be fixed by the directors who will at the same time determine
the designation, rights, privileges, restrictions and conditions attaching to
that series of Class AAA preference shares. Each of the series of the
Class AAA preference shares are subject to the provisions of the
Class AAA preference shares.




Priority




The
Class AAA preference shares rank junior to the Class A preference
shares and the Class AA preference shares as to the payment of dividends
and return of capital in the event of liquidation, dissolution or winding up of
Brookfield Properties. The Class AAA preference shares rank senior to the
Common Shares and all other shares ranking junior to the Class AAA
preference shares. The Class AAA preference shares are subject to the
provisions of the Class A preference shares and to the Class AA
preference shares. Pursuant to the Canada Business Corporations
Act, each series of Class AAA preference shares participates
rateably with every other series of Class AAA preference shares in respect
of accumulated dividends and return of capital.




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Voting




Subject
to applicable corporate law, the holders of the Class AAA preference shares
or of a series thereof are not entitled as holders of that Class or series to
receive notice of, to attend or to vote at any meeting of the shareholders of
Brookfield Properties. Notwithstanding the foregoing, votes may be granted to a
series of Class AAA preference shares when dividends are in arrears on any
one or more series, in accordance with the applicable series
provisions.




Approval




The
approval of the holders of the Class AAA preference shares of any matters
to be approved by a separate vote of the holders of the Class AAA
preference shares may be given by special resolution in accordance with the
share conditions for the Class AAA preference shares.




Specific
Provisions of Class AAA Preference Shares, Series E




The
Class AAA Preference Shares, Series E (the “Class AAA,
Series E Shares”) are accounted for by Brookfield Properties as debt, in
accordance with Canadian GAAP.




Dividends




The
holders of the Class AAA, Series E Shares are entitled to receive, as and
when declared by the directors of Brookfield Properties, cumulative preferential
cash dividends in an amount per share per annum equal to the product of C$25.00
and 70% of the “Average Prime Rate” (as defined in the share conditions for the
Class AAA, Series E Shares), payable quarterly on the last day of
March, June, September and December in each year.




Redemption




Subject
to the terms of any shares of Brookfield Properties ranking prior to the Class
AAA, Series E Shares, Brookfield Properties may redeem at any time all, or
from time to time any part, of the then outstanding Class AAA, Series E
Shares on payment for each share to be redeemed of an amount equal to C$25.00,
together with an amount equal to all dividends accrued and unpaid thereon up to
the redemption date.  Notice of redemption must be given by Brookfield
Properties at least 30 days before the date specified for
redemption.




Retraction




Subject
to the restrictions imposed by applicable law, the Class AAA, Series E
Shares may be tendered at any time for retraction at a price equal to C$25.00
per share, together with an amount equal to all dividends accrued and unpaid
thereon up to the date of retraction.  Written notice of retraction
must be given by the holder to Brookfield Properties at least 10 days prior
to the date specified for retraction.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA,
Series E Shares will be entitled to payment of an amount equal to C$25.00
per share, plus an amount equal to all dividends accrued and unpaid thereon up
to the date of payment.  After such payment, the holders of Class AAA,
Series E Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Amendment




The
provisions of the Class AAA, Series E Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series E Shares by
special resolution, given in accordance with the share provisions for the Class
AAA, Series E Shares, in addition to any vote or authorization required by
law.




Specific
Provisions of the Class AAA Preference Shares, Series F




Dividends




The
holders of the Class AAA Preference Shares, Series F (the “Class AAA,
Series F Shares”) are each entitled to receive fixed cumulative
preferential cash dividends, if, as and when declared by the board of
directors of Brookfield Properties, in an amount equal to C$1.50 per share per
annum, accruing daily from the date of issue (less any tax required to be
deducted and withheld by Brookfield Properties), payable quarterly on the last
day of March, June, September and December in each year.




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Redemption




The Class
AAA, Series F Shares are not redeemable before September 30,
2009.  On or after this date, subject to the terms of any shares of
Brookfield Properties ranking prior to the Class AAA, Series F Shares,
to applicable law and to the provisions described under “Specific
Provisions of the Class AAA Preference Shares, Series F — Restriction
on Dividends and Retirement and Issue of Shares”, Brookfield Properties may, at
its option, at any time redeem all, or from time to time any part, of the
outstanding Class AAA, Series F Shares, by the payment of an amount in cash
for each such share so redeemed of C$25.75 if redeemed before September 30,
2010, of C$25.50 if redeemed on or after September 30, 2010 but before
September 30, 2011, of C$25.25 if redeemed on or after September 30,
2011 but before September 30, 2012, and of C$25.00 thereafter plus, in each
case, all accrued and unpaid dividends (for greater certainty excluding declared
dividends with a record date prior to the date fixed for redemption) up to but
excluding the date fixed for redemption (less any tax required to be deducted
and withheld by Brookfield Properties).




Conversion
at the Option of Brookfield Properties




The Class
AAA, Series F Shares are not convertible at the option of Brookfield
Properties prior to September 30, 2009. On and after this date, Brookfield
Properties may at its option, subject to applicable law and, if required, to
stock exchange approval, convert all, or from time to time any part, of the
outstanding Class AAA, Series F Shares into that number of freely tradeable
Common Shares determined (per Class AAA, Series F Share) by dividing the
then applicable redemption price, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 and 95% of the weighted average trading
price of the Common Shares on the TSX (or, if the Common Shares do not trade on
the TSX on the date specified for conversion, on the exchange or trading system
with the highest volume of Common Shares traded during the 20 trading day period
referred to below) for the 20 consecutive trading days ending on: (i) the
fourth day prior to the date specified for conversion, or (ii) if such
fourth day is not a trading day, the immediately preceding trading day (for the
purpose of the description of the Class AAA, Series F Shares, the “Current
Market Price”). Fractional Common Shares will not be issued on any conversion of
Class AAA, Series F Shares, but in lieu thereof Brookfield Properties will
make cash payments.




Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after March 31, 2013, each Class AAA, Series F Share will be
convertible at the option of the holder on the last day of each of March, June,
September and December in each year on at least 30 days notice (which
notice shall be irrevocable) into that number of freely tradeable Common Shares
determined by dividing C$25.00, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 and 95% of the current market price.
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series F Shares, but in lieu thereof Brookfield Properties will make cash
payments.




Subject
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series F — Restrictions on Dividends and Retirement
and Issue of Shares” as applicable, Brookfield Properties may, by notice given
not later than 20 days before the date fixed for conversion to all holders
who have given a conversion notice, either (i) redeem on the date fixed for
conversion all or any part of the Class AAA, Series F Shares forming the
subject matter of the applicable conversion notice, or (ii) cause the
holder of such Class AAA, Series F Shares to sell on the date fixed
for conversion all or any part of such Class AAA, Series F Shares to
another purchaser or purchasers in the event that a purchaser or purchasers
willing to purchase all or any part of such Series F Shares is or are
found. Any such redemption or purchase shall be made by the payment of an amount
in cash of C$25.00 per share, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion. The Class AAA, Series F Shares to be so redeemed or purchased
shall not be converted on the date set forth in the conversion
notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under “Specific Provisions of the
Class AAA Preference Shares, Series F — Restrictions on Dividends and
Retirement and Issue of Shares”, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series F Shares at
the lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




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Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA,
Series F Shares are entitled to payment of an amount equal to C$25.00 per
share, plus an amount equal to all accrued and unpaid dividends up to but
excluding the date fixed for payment or distribution (less any tax required to
be deducted and withheld by Brookfield Properties), before any amount is paid or
any assets of Brookfield Properties are distributed to the holders of any shares
ranking junior as to capital to the Class AAA, Series F Shares. The holders
of the Class AAA, Series F Shares are not entitled to share in any further
distribution of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series F Shares are outstanding, Brookfield
Properties will not, without the approval of the holders of the Class AAA,
Series F Shares:




a)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series F Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series F Shares;




b)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series F Shares, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any shares of Brookfield Properties ranking as to
      capital junior to the Class AAA, Series F
  Shares;




c)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA,
      Series F Shares then
outstanding;




d)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA Preference Shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series F Shares; or




e)
            issue
      any additional Class AAA, Series F Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the Class AAA,
      Series F Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series F Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series F
Shares with respect to the payment of dividends have been declared, paid or set
apart for payment.




Amendment




The
provisions of the Class AAA, Series F Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series F Shares by
special resolution, given in accordance with the share provisions for the Class
AAA, Series F Shares, in addition to any vote or authorization required by
law.




Voting




The
holders of the Class AAA, Series F Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA,
Series F Shares as a series) to receive notice of, attend, or vote at, any
meeting of shareholders of Brookfield Properties unless and until Brookfield
Properties shall have failed to pay eight quarterly dividends on the
Class AAA, Series F Shares, whether or not consecutive and whether or
not such dividends have been declared and whether or not there are any moneys of
Brookfield Properties properly applicable to the payment of dividends on
Class AAA, Series F Shares. In that event, and for only so long as any
such dividends remain in arrears, the holders of the Class AAA,
Series F Shares will be entitled to receive notice of and to attend each
meeting of Brookfield Properties’ shareholders other than any meetings at which
only holders of another specified class or series are entitled to vote, and to
one vote for each Class AAA, Series F Share held.




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Specific
Provisions of the Class AAA Preference Shares, Series G




Dividends




The
holders of the Class AAA Preference Shares, Series G (the “Class AAA,
Series G Shares”) are each entitled to receive fixed cumulative
preferential cash dividends, if, as and when declared by the board of directors
of Brookfield Properties, in an amount equal to $1.3125 per share per annum,
accruing daily from the date of issue (less any tax required to be deducted and
withheld by Brookfield Properties), payable quarterly on the last day of March,
June, September and December in each year.




Redemption




The Class
AAA, Series G Shares are not redeemable before June 30, 2011. On or
after that date, subject to the terms of any shares of Brookfield Properties
ranking prior to the Class AAA, Series G Shares, to applicable law and
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series G — Restrictions on Dividends and Retirement
and Issue of Shares”, Brookfield Properties may, at its option, at any time
redeem all, or from time to time any part, of the outstanding Class AAA,
Series G Shares, by the payment of an amount in cash for each such share so
redeemed of $26.00 if redeemed before June 30, 2012, of $25.67 if redeemed
on or after June 30, 2012 but before June 30, 2013, of $25.33 if
redeemed on or after June 30, 2013 but before June 30, 2014, and of
$25.00 thereafter, plus, in each case, all accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(less any tax required to be deducted and withheld by Brookfield
Properties).




Conversion
at the Option of Brookfield Properties




The Class
AAA, Series G Shares are not convertible at the option of Brookfield
Properties prior to June 30, 2011. On or after this date, Brookfield
Properties may at its option, subject to applicable law and, if required, to
stock exchange approval, convert all, or from time to time any part, of the
outstanding Class AAA, Series G Shares into that number of freely tradeable
Common Shares determined (per Class AAA, Series G Share) by dividing the
then applicable redemption price, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of $2.00 or 95% of the weighted average trading price
of the Common Shares on the New York Stock Exchange (“the “NYSE”) (or, if
the Common Shares do not trade on the NYSE on the date specified for conversion,
on the exchange or trading system with the highest volume of Common Shares
traded during the 20 trading day period referred to below) for the 20
consecutive trading days ending on: (i) the fourth day prior to the date
specified for conversion, or (ii) if such fourth day is not a trading day,
the immediately preceding trading day (for the purpose of the description of the
Class AAA, Series G Shares, the “Current Market Price”). Fractional Common
Shares will not be issued on any conversion of Class AAA, Series G Shares,
but in lieu thereof Brookfield Properties will make cash payments.




Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after September 30, 2015, each Class AAA, Series G Share will be
convertible at the option of the holder on the last day of each of March, June,
September and December in each year on at least 30 days notice (which
notice shall be irrevocable) into that number of freely tradeable Common Shares
determined by dividing $25.00, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of $2.00 or 95% of the then Current Market Price.
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series G Shares, but in lieu thereof Brookfield Properties will make cash
payments.




Subject
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series G — Restrictions on Dividends and Retirement
and Issue of Shares” as applicable, Brookfield Properties may, by notice given
not later than 20 days before the date fixed for conversion to all holders
who have given a conversion notice, either (i) redeem on the date fixed for
conversion all or any part of the Class AAA, Series G Shares forming the
subject matter of the applicable conversion notice, or (ii) cause the
holder of such Class AAA, Series G Shares to sell on the date fixed
for conversion all or any part of such Class AAA, Series G Shares to
another purchaser or purchasers in the event that a purchaser or purchasers
willing to purchase all or any part of such Class AAA, Series G Shares is
or are found. Any such redemption or purchase shall be made by the payment of an
amount in cash of $25.00 per share, together with all accrued and unpaid
dividends (for greater certainty excluding declared dividends with a record date
prior to the date fixed for conversion) up to but excluding the date fixed for
conversion. The Class AAA, Series G Shares to be so redeemed or purchased
shall not be converted on the date set forth in the conversion
notice.




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Purchase
for Cancellation




Subject
to applicable law and the provisions described under “Specific Provisions of the
Class AAA Preference Shares, Series G — Restrictions on Dividends and
Retirement and Issue of Shares”, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series G Shares at
the lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA,
Series G Shares will be entitled to payment of an amount equal to $25.00
per share, plus an amount equal to all accrued and unpaid dividends up to but
excluding the date fixed for payment or distribution (less any tax required to
be deducted and withheld by Brookfield Properties), before any amount is paid or
any assets of Brookfield Properties are distributed to the holders of any shares
ranking junior as to capital to the Class AAA, Series G Shares. The holders
of the Class AAA, Series G Shares will not be entitled to share in any
further distribution of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series G Shares are outstanding, Brookfield
Properties will not, without the approval of the holders of the Class AAA,
Series G Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series G Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series G Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series G Shares, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any shares of Brookfield Properties ranking as to
      capital junior to the Class AAA, Series G
  Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA,
      Series G Shares then
outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series G Shares; or




(v)
            issue
      any additional Class AAA, Series G Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the Class AAA,
      Series G Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series G Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series G
Shares with respect to the payment of dividends have been declared, paid or set
apart for payment.




Amendment




The
provisions of the Class AAA, Series G Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series G Shares by
special resolution, given in accordance with the share provisions of the Class
AAA, Series G Shares, in addition to any vote or authorization required by
law.




Voting




The
holders of the Class AAA, Series G Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA,
Series G Shares as a series) to receive notice of, attend, or vote at, any
meeting of shareholders of Brookfield Properties unless and until Brookfield
Properties shall have failed to pay eight quarterly dividends on the
Class AAA, Series G Shares, whether or not consecutive and whether or
not such dividends have been declared and whether or not there are any moneys of
Brookfield Properties properly applicable to the payment of dividends on Class
AAA, Series G Shares. In that event, and for only so long as any such
dividends remain in arrears, the holders of the Class AAA, Series G Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Class AAA, Series G Share held.




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Specific
Provisions of the Class AAA Preference Shares, Series H




Dividends




The
holders of the Class AAA Preference Shares, Series H (the “Class AAA,
Series H Shares”) are each entitled to receive fixed cumulative
preferential cash dividends, if, as and when declared by the board of directors
of Brookfield Properties, in an amount equal to C$1.4375 per share per annum,
accruing daily from the date of issue (less any tax required to be deducted and
withheld by Brookfield Properties), payable quarterly on the last day of March,
June, September and December in each year.




Redemption




The Class
AAA, Series H Shares are not redeemable before December 31, 2011. On
or after that date, subject to the terms of any shares of Brookfield Properties
ranking prior to the Class AAA, Series H Shares, to applicable law and
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series H — Restrictions on Dividends and Retirement
and Issue of Shares”, Brookfield Properties may, at its option, at any time
redeem all, or from time to time any part, of the outstanding Class AAA,
Series H Shares, by the payment of an amount in cash for each such share so
redeemed of C$26.00 if redeemed before December 31, 2012, of C$25.67 if
redeemed on or after December 31, 2012 but before December 31, 2013,
of C$25.33 if redeemed on or after December 31, 2013 but before
December 31, 2014, and of C$25.00 thereafter, plus, in each case, all
accrued and unpaid dividends (for greater certainty excluding declared dividends
with a record date prior to the date fixed for redemption) up to but excluding
the date fixed for redemption (less any tax required to be deducted and withheld
by Brookfield Properties).




Conversion
at the Option of Brookfield Properties




The Class
AAA, Series H Shares are not convertible at the option of Brookfield
Properties prior to December 31, 2011. On or after this date, Brookfield
Properties may at its option, subject to applicable law and, if required, to
stock exchange approval, convert all, or from time to time any part, of the
outstanding Class AAA, Series H Shares into that number of freely tradeable
Common Shares determined (per Class AAA, Series H Share) by dividing the
then applicable redemption price, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 or 95% of the weighted average trading
price of the Common Shares on the TSX (or, if the Common Shares do not trade on
the TSX on the date specified for conversion, on the exchange or trading system
with the highest volume of Common Shares traded during the 20 trading day period
referred to below) for the 20 consecutive trading days ending on: (i) the
fourth day prior to the date specified for conversion, or (ii) if such
fourth day is not a trading day, the immediately preceding trading day (for the
purpose of the description of the Class AAA, Series H Shares, the “Current
Market Price”). Fractional Common Shares will not be issued on any conversion of
Class AAA, Series H Shares, but in lieu thereof Brookfield Properties will
make cash payments.




Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after December 31, 2015, each Class AAA, Series H Share will be
convertible at the option of the holder on the last day of each of March, June,
September and December in each year on at least 30 days notice (which
notice shall be irrevocable) into that number of freely tradeable Common Shares
determined by dividing C$25.00, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 or 95% of the then Current Market Price.
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series H Shares, but in lieu thereof Brookfield Properties will make cash
payments.




Subject
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series H — Restrictions on Dividends and Retirement
and Issue of Shares” as applicable, Brookfield Properties may, by notice given
not later than 20 days before the date fixed for conversion to all holders
who have given a conversion notice, either (i) redeem on the date fixed for
conversion all or any part of the Class AAA, Series H Shares forming the
subject matter of the applicable conversion notice, or (ii) cause the
holder of such Class AAA, Series H Shares to sell on the date fixed
for conversion all or any part of such Class AAA, Series H Shares to
another purchaser or purchasers in the event that a purchaser or purchasers
willing to purchase all or any part of such Class AAA, Series H Shares
is or are found. Any such redemption or purchase shall be made by the payment of
an amount in cash of C$25.00 per share, together with all accrued and unpaid
dividends (for greater certainty excluding declared dividends with a record date
prior to the date fixed for conversion) up to but excluding the date fixed for
conversion. The Class AAA, Series H Shares to be so redeemed or purchased
shall not be converted on the date set forth in the conversion
notice.




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Purchase
for Cancellation




Subject
to applicable law and the provisions described under “Specific Provisions of the
Class AAA Preference Shares, Series H — Restrictions on Dividends and
Retirement and Issue of Shares”, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series H Shares at
the lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA,
Series H Shares will be entitled to payment of an amount equal to C$25.00
per share, plus an amount equal to all accrued and unpaid dividends up to but
excluding the date fixed for payment or distribution (less any tax required to
be deducted and withheld by Brookfield Properties), before any amount is paid or
any assets of Brookfield Properties are distributed to the holders of any shares
ranking junior as to capital to the Class AAA, Series H Shares. The holders
of the Class AAA, Series H Shares will not be entitled to share in any
further distribution of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series H Shares are outstanding, Brookfield
Properties will not, without the approval of the holders of the Class AAA,
Series H Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series H Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series H Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series H Shares, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any shares of Brookfield Properties ranking as to
      capital junior to the Class AAA, Series H
  Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA,
      Series H Shares then
outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series H Shares; or




(v)
            issue
      any additional Class AAA, Series H Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the Class AAA,
      Series H Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series H Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series H
Shares with respect to the payment of dividends have been declared, paid or set
apart for payment.




Amendment




The
provisions of the Class AAA, Series H Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series H Shares by
special resolution, given in accordance with the share provisions of the Class
AAA, Series H Shares, in addition to any vote or authorization required by
law.




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Voting




The
holders of the Class AAA, Series H Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA,
Series H Shares as a series) to receive notice of, attend, or vote at, any
meeting of shareholders of Brookfield Properties unless and until Brookfield
Properties shall have failed to pay eight quarterly dividends on the
Class AAA, Series H Shares, whether or not consecutive and whether or
not such dividends have been declared and whether or not there are any moneys of
Brookfield Properties properly applicable to the payment of dividends on Class
AAA, Series H Shares. In that event, and for only so long as any such
dividends remain in arrears, the holders of the Class AAA, Series H Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Class AAA, Series H Share held.




Specific
Provisions of the Class AAA Preference Shares, Series I




Dividends




The
holders of the Class AAA Preference Shares, Series I (the “Class AAA,
Series I Shares”) are each entitled to receive fixed cumulative
preferential cash dividends, if, as and when declared by the board of directors
of Brookfield Properties, in an amount equal to C$1.30 per share per annum,
accruing daily from the date of issue (less any tax required to be deducted and
withheld by Brookfield Properties), payable quarterly on the last day of March,
June, September and December in each year.




Redemption




The Class
AAA, Series I Shares are not redeemable before December 31, 2008. On or
after that date, subject to the terms of any shares of Brookfield Properties
ranking prior to the Class AAA, Series I Shares, to applicable law and to
the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series I — Restrictions on Dividends and Retirement and
Issue of Shares”, Brookfield Properties may, at its option, at any time redeem
all, or from time to time any part, of the outstanding Class AAA, Series I
Shares, by the payment of an amount in cash for each such share so redeemed of
C$25.75 if redeemed before December 31, 2009, of C$25.50 if redeemed on or
after December 31, 2009 but before December 31, 2010, and of C$25.00
thereafter, plus, in each case, all accrued and unpaid dividends (for greater
certainty excluding declared dividends with a record date prior to the date
fixed for redemption) up to but excluding the date fixed for redemption (less
any tax required to be deducted and withheld by Brookfield
Properties).




Conversion
at the Option of Brookfield Properties




The Class
AAA, Series I Shares are not convertible at the option of Brookfield Properties
prior to December 31, 2008. On or after this date, Brookfield Properties
may at its option, subject to applicable law and, if required, to stock exchange
approval, convert all, or from time to time any part, of the outstanding
Class AAA, Series I Shares into that number of freely tradable Common
Shares determined (per Class AAA, Series I Share) by dividing the then
applicable redemption price, together with all accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for conversion) up to but excluding the date fixed for conversion, by
the greater of C$2.00 or 95% of the weighted average trading price of the Common
Shares on the TSX (or, if the Common Shares do not trade on the TSX on the date
specified for conversion, on the exchange or trading system with the highest
volume of Common Shares traded during the 20 trading day period referred to
below) for the 20 consecutive trading days ending on: (i) the fourth day
prior to the date specified for conversion, or (ii) if such fourth day is
not a trading day, the immediately preceding trading day (for the purpose of the
description of the Class AAA, Series I Shares, the “Current Market Price”).
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series I Shares, but in lieu thereof Brookfield Properties will make cash
payments.




Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after December 31, 2010, each Class AAA, Series I Share will be
convertible at the option of the holder on the last day of each of March, June,
September and December in each year on at least 30 days notice (which
notice shall be irrevocable) into that number of freely tradeable Common Shares
determined by dividing C$25.00, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 or 95% of the then Current Market Price.
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series I Shares, but in lieu thereof Brookfield Properties will make cash
payments.




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| Brookfield Properties Corporation | 2010 Annual Information Form
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Subject
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series I — Restrictions on Dividends and Retirement and
Issue of Shares” as applicable, Brookfield Properties may, by notice given not
later than 20 days before the date fixed for conversion to all holders who
have given a conversion notice, either (i) redeem on the date fixed for
conversion all or any part of the Class AAA, Series I Shares forming the subject
matter of the applicable conversion notice, or (ii) cause the holder of
such Class AAA, Series I Shares to sell on the date fixed for conversion
all or any part of such Class AAA, Series I Shares to another purchaser or
purchasers in the event that a purchaser or purchasers willing to purchase all
or any part of such Class AAA, Series I Shares is or are found. Any such
redemption or purchase shall be made by the payment of an amount in cash of
C$25.00 per share, together with all accrued and unpaid dividends (for greater
certainty excluding declared dividends with a record date prior to the date
fixed for conversion) up to but excluding the date fixed for conversion. The
Class AAA, Series I Shares to be so redeemed or purchased shall not be converted
on the date set forth in the conversion notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under “Specific Provisions of the
Class AAA Preference Shares, Series I — Restrictions on Dividends and
Retirement and Issue of Shares”, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series I Shares at
the lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
I Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series I Shares. The holders of the Class
AAA, Series I Shares will not be entitled to share in any further
distribution of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series I Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series I
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series I Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series I Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series I Shares, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any shares of Brookfield Properties ranking as to
      capital junior to the Class AAA, Series I
  Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series I
      Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to
      the payment of dividends or return of capital on a parity with the Class
      AAA, Series I Shares; or




(v)
            issue
      any additional Class AAA, Series I Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the Class AAA,
      Series I Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series I Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series I
Shares with respect to the payment of dividends have been declared, paid or set
apart for payment.




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Amendment




The
provisions of the Class AAA, Series I Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series I Shares by
special resolution, given in accordance with the share provisions of the Class
AAA, Series I Shares, in addition to any vote or authorization required by
law.




Voting




The
holders of the Class AAA, Series I Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series I
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series
I Shares, whether or not consecutive and whether or not such dividends have been
declared and whether or not there are any moneys of Brookfield Properties
properly applicable to the payment of dividends on Class AAA, Series I Shares.
In that event, and for only so long as any such dividends remain in arrears, the
holders of the Class AAA, Series I Shares will be entitled to receive notice of
and to attend each meeting of Brookfield Properties’ shareholders other than any
meetings at which only holders of another specified class or series are entitled
to vote, and to one vote for each Class AAA, Series I Share held.




Specific
Provisions of the Class AAA Preference Shares, Series J




Dividends




The
holders of the Class AAA Preference Shares, Series J (the “Class AAA,
Series J Shares”) are each entitled to receive fixed cumulative preferential
cash dividends, if, as and when declared by the board of directors of Brookfield
Properties, in an amount equal to C$1.25 per share per annum, accruing daily
from the date of issue (less any tax required to be deducted and withheld by
Brookfield Properties), payable quarterly on the last day of March, June,
September and December in each year.




Redemption




The
Class AAA, Series J Shares are not redeemable before June 30, 2010. On or
after that date, subject to the terms of any shares of Brookfield Properties
ranking prior to the Class AAA, Series J Shares, to applicable law and
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series J — Restrictions on Dividends and Retirement and
Issue of Shares”, Brookfield Properties may, at its option, at any time redeem
all, or from time to time any part, of the outstanding Class AAA, Series J
Shares, by the payment of an amount in cash for each such share so redeemed of
C$26.00 if redeemed before June 30, 2011, of C$25.75 if redeemed on or after
June 30, 2011 but before June 30, 2012, at C$25.50 if redeemed on or after June
30, 2012, but before June 30, 2013, C$25.25 if redeemed on or after June 30,
2013, but before June 30, 2014, and of C$25.00 thereafter, plus, in each case,
all accrued and unpaid dividends (for greater certainty excluding declared
dividends with a record date prior to the date fixed for redemption) up to but
excluding the date fixed for redemption (less any tax required to be deducted
and withheld by Brookfield Properties).




Conversion
at the Option of Brookfield Properties




The
Class AAA, Series J Shares are not convertible at the option of Brookfield
Properties prior to June 30, 2010. On or after this date, Brookfield Properties
may at its option, subject to applicable law and, if required, to stock exchange
approval, convert all, or from time to time any part, of the outstanding
Class AAA, Series J Shares into that number of freely tradeable Common
Shares determined (per Class AAA, Series J Share) by dividing the then
applicable redemption price, together with all accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for conversion) up to but excluding the date fixed for conversion, by
the greater of C$2.00 or 95% of the weighted average trading price of the Common
Shares on the TSX (or, if the Common Shares do not trade on the TSX on the date
specified for conversion, on the exchange or trading system with the highest
volume of Common Shares traded during the 20 trading day period referred to
below) for the 20 consecutive trading days ending on: (i) the fourth
day prior to the date specified for conversion, or (ii) if such fourth day
is not a trading day, the immediately preceding trading day (for the purpose of
the description of the Class AAA, Series J Shares, the “Current Market
Price”). Fractional Common Shares will not be issued on any conversion of
Class AAA, Series J Shares, but in lieu thereof Brookfield Properties will
make cash payments.




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Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after December 31, 2014, each Class AAA, Series J Share will be
convertible at the option of the holder on the last day of each of March, June,
September and December in each year on at least 30 days notice (which
notice shall be irrevocable) into that number of freely tradeable Common Shares
determined by dividing C$25.00, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion, by the greater of C$2.00 or 95% of the then Current Market Price.
Fractional Common Shares will not be issued on any conversion of Class AAA,
Series J Shares, but in lieu thereof Brookfield Properties will make cash
payments.




Subject
to the provisions described under “Specific Provisions of the Class AAA
Preference Shares, Series J — Restrictions on Dividends and Retirement and
Issue of Shares” as applicable, Brookfield Properties may, by notice given not
later than 20 days before the date fixed for conversion to all holders who
have given a conversion notice, either (i) redeem on the date fixed for
conversion all or any part of the Class AAA, Series J Shares forming the
subject matter of the applicable conversion notice, or (ii) cause the
holder of such Class AAA, Series J Shares to sell on the date fixed for
conversion all or any part of such Class AAA, Series J Shares to another
purchaser or purchasers in the event that a purchaser or purchasers willing to
purchase all or any part of such Class AAA, Series J Shares is or are
found. Any such redemption or purchase shall be made by the payment of an amount
in cash of C$25.00 per share, together with all accrued and unpaid dividends
(for greater certainty excluding declared dividends with a record date prior to
the date fixed for conversion) up to but excluding the date fixed for
conversion. The Class AAA, Series J Shares to be so redeemed or purchased
shall not be converted on the date set forth in the conversion
notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under “Specific Provisions of the
Class AAA Preference Shares, Series J — Restrictions on Dividends and
Retirement and Issue of Shares”, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series J Shares at
the lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA,
Series J Shares will be entitled to payment of an amount equal to C$25.00 per
share, plus an amount equal to all accrued and unpaid dividends up to but
excluding the date fixed for payment or distribution (less any tax required to
be deducted and withheld by Brookfield Properties), before any amount is paid or
any assets of Brookfield Properties are distributed to the holders of any shares
ranking junior as to capital to the Class AAA, Series J Shares. The holders
of the Class AAA, Series J Shares will not be entitled to share in any
further distribution of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series J Shares are outstanding, Brookfield
Properties will not, without the approval of the holders of the Class AAA,
Series J Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series J Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the
      Class AAA, Series J Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series J Shares, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any shares of Brookfield Properties ranking as to
      capital junior to the Class AAA, Series J
  Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA,
      Series J Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to
      the payment of dividends or return of capital on a parity with the
      Class AAA, Series J Shares; or




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(v)
            issue
      any additional Class AAA, Series J Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the
      Class AAA, Series J Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series J Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series J
Shares with respect to the payment of dividends have been declared, paid or set
apart for payment.




Amendment




The
provisions of the Class AAA, Series J Shares may be amended, but only with
the prior approval of the holders of the Class AAA, Series J Shares by
special resolution, given in accordance with the share provisions of the Class
AAA, Series J Shares, in addition to any vote or authorization required by
law.




Voting




The
holders of the Class AAA, Series J Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of
Class AAA preference shares as a class and meetings of the holders of
Class AAA, Series J Shares as a series) to receive notice of, attend, or
vote at, any meeting of shareholders of Brookfield Properties unless and until
Brookfield Properties shall have failed to pay eight quarterly dividends on the
Class AAA, Series J Shares, whether or not consecutive and whether or not
such dividends have been declared and whether or not there are any moneys of
Brookfield Properties properly applicable to the payment of dividends on
Class AAA, Series J Shares. In that event, and for only so long as any such
dividends remain in arrears, the holders of the Class AAA, Series J Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Class AAA, Series J Share held.




Specific
Provisions of the Class AAA Preference Shares, Series K




Dividends




The
holders of the Class AAA Preference Shares, Series K (the “Class AAA, Series K
Shares) are entitled to receive fixed cumulative preferential cash dividends,
if, as and when declared by the board of directors of Brookfield Properties, in
an amount equal to C$1.30 per share per annum, accruing daily from the date of
issue (less any tax required to be deducted and withheld by Brookfield
Properties), payable quarterly on the last day of March, June, September and
December in each year.




Redemption




The Class
AAA, Series K Shares are not redeemable before December 31, 2012. On or after
that date, subject to the terms of any shares of Brookfield Properties ranking
prior to the Class AAA, Series K Shares, to applicable law and to the provisions
described under ‘‘Specific Provisions of the Class AAA Preference Shares, Series
K — Restrictions on Dividends and Retirement and Issue of Shares’’, Brookfield
Properties may, at its option, at any time redeem all, or from time to time any
part, of the outstanding Class AAA, Series K Shares, by the payment of an amount
in cash for each such share so redeemed of C$26.00 if redeemed before December
31, 2013, of C$25.67 if redeemed on or after December 31, 2013 but before
December 31, 2014, at C$25.33 if redeemed on or after December 31, 2014, but
before December 31, 2015, and of C$25.00 thereafter plus, in each case, all
accrued and unpaid dividends (for greater certainty excluding declared dividends
with a record date prior to the date fixed for redemption) up to but excluding
the date fixed for redemption (less any tax required to be deducted and withheld
by Brookfield Properties).




Conversion
at the Option of Brookfield Properties




The Class
AAA, Series K Shares are not convertible at the option of Brookfield Properties
prior to December 31, 2012. On or after this date, Brookfield Properties may,
subject to applicable law and, if required, to stock exchange approval, convert
all, or from time to time any part, of the outstanding Class AAA, Series K
Shares into that number of freely tradeable Common Shares determined (per Series
K Preference Share) by dividing the then applicable redemption price, together
with all accrued and unpaid dividends (for greater certainty excluding declared
dividends with a record date prior to the date fixed for conversion) up to but
excluding the date fixed for conversion, by the greater of C$2.00 or 95% of the
weighted average trading price of the Common Shares on the TSX (or, if the
Common Shares do not trade on the TSX on the date specified for conversion, on
the exchange or trading system with the highest volume of Common Shares traded
during the 20 trading day period referred to below) for the 20 consecutive
trading days ending on: (i) the fourth day prior to the date specified for
conversion, or (ii) if such fourth day is not a trading day, the immediately
preceding trading day (for the purpose of the description of the Class AAA,
Series K Shares, the ‘‘Current Market Price’’).  Fractional Common
Shares will not be issued on any conversion of Class AAA, Series K Shares, but
in lieu thereof Brookfield Properties will make cash payments.




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Conversion
at the Option of the Holder




Subject
to applicable law and the rights of Brookfield Properties described below, on
and after December 31, 2016, each Series K Preference Share will be convertible
at the option of the holder on the last day of each of March, June, September
and December in each year on at least 30 days notice (which notice shall be
irrevocable) into that number of freely tradeable Common Shares determined by
dividing C$25.00, together with all accrued and unpaid dividends (for greater
certainty excluding declared dividends with a record date prior to the date
fixed for conversion) up to but excluding the date fixed for conversion, by the
greater of C$2.00 or 95% of the then Current Market Price. Fractional Common
Shares will not be issued on any conversion of Class AAA, Series K Shares, but
in lieu thereof Brookfield Properties will make cash payments.




Subject
to the provisions described under ‘‘Specific Provisions of the Class AAA
Preference Shares, Series K — Restrictions on Dividends and Retirement and Issue
of Shares’’ as applicable, Brookfield Properties may, by notice given not later
than 20 days before the date fixed for conversion to all holders who have given
a conversion notice, either (i) redeem on the date fixed for conversion all or
any part of the Class AAA, Series K Shares forming the subject matter of the
applicable conversion notice, or (ii) cause the holder of such Class AAA, Series
K Shares to sell on the date fixed for conversion all or any part of such Class
AAA, Series K Shares to another purchaser or purchasers in the event that a
purchaser or purchasers willing to purchase all or any part of such Class AAA,
Series K Shares is or are found. Any such redemption or purchase shall be made
by the payment of an amount in cash of C$25.00 per share, together with all
accrued and unpaid dividends (for greater certainty excluding declared dividends
with a record date prior to the date fixed for conversion) up to but excluding
the date fixed for conversion. The Class AAA, Series K Shares to be so redeemed
or purchased shall not be converted on the date set forth in the conversion
notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series K — Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series K Shares at the
lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
K Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series K Shares. The holders of the Class
AAA, Series K Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series K Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series K
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series K Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series K Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series K Shares, redeem or call for redemption,
      purchase or otherwise pay off, retire or make any return of capital in
      respect of any shares of Brookfield Properties ranking as to capital
      junior to the Class AAA, Series K
Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series K
      Shares then outstanding;




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 73




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series K Shares; or




(v)
            issue
      any additional Class AAA, Series K Shares or any shares ranking as to
      dividends or return of capital prior to or on a parity with the Class AAA,
      Series K Shares,




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series K Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series K Shares
with respect to the payment of dividends have been declared, paid or set apart
for payment.




Amendment




The
provisions of the Class AAA, Series K Shares may be amended, but only with the
prior approval of the holders of the Class AAA, Series K Shares by special
resolution, given in accordance with the share provisions of the Class AAA,
Series K Shares, in addition to any vote or authorization required by
law.




Voting




The
holders of the Class AAA, Series K Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series K
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series K
Shares, whether or not consecutive and whether or not such dividends have been
declared and whether or not there are any moneys of Brookfield Properties
properly applicable to the payment of dividends on Series K Preference Shares.
In that event, and for only so long as any such dividends remain in arrears, the
holders of the Class AAA, Series K Shares will be entitled to receive notice of
and to attend each meeting of Brookfield Properties’ shareholders other than any
meetings at which only holders of another specified class or series are entitled
to vote, and to one vote for each Series K Preference Share held.




Specific
Provisions of the Class AAA Preference Shares, Series L




Dividends




The
holders of the Class AAA Preference Shares, Series L (the “Class AAA, Series L
Shares) are entitled to receive fixed cumulative preferential cash dividends,
if, as and when declared by the board of directors of Brookfield Properties, in
an amount equal to C$1.6875 per share per annum, accruing daily from the date of
issue (less any tax required to be deducted and withheld by Brookfield
Properties), payable quarterly on the last day of March, June, September and
December in each year.




Redemption




The Class
AAA, Series L Shares are not redeemable before September 30, 2014. On or after
that date, subject to the terms of any shares of Brookfield Properties ranking
prior to the Class AAA, Series L Shares, to applicable law and to the provisions
described under ‘‘Specific Provisions of the Class AAA Preference Shares, Series
L – Restrictions on Dividends and Retirement and Issue of Shares’’, Brookfield
Properties may, at its option, at any time redeem all, or from time to time any
part, of the outstanding Class AAA, Series L Shares, by the payment of an amount
in cash for each such share so redeemed of C$25.00 together with all accrued and
unpaid dividends (for greater certainty excluding declared dividends with a
record date prior to the date fixed for redemption) up to but excluding the date
fixed for redemption (less any tax required to be deducted and withheld by
Brookfield Properties), on not less than 30 days written notice.




Conversion
at the Option of the Holder




Subject
to applicable law and the provisions of the Class AAA, Series L Shares, on and
after September 30, 2014 and every five years thereafter, the holders of each
Class AAA, Series L Share will have the right, at their option, to convert all
or any part of the outstanding Class AAA, Series L Share into Class AAA
Preference Shares, Series M on the basis of one (1) Class AAA Preference Share,
Series M for each Class AAA, Series L Share, on not less than 30 days written
notice.




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Purchase
for Cancellation




Subject
to applicable law and the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series L – Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series L Shares at the
lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
L Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series L Shares. The holders of the Class
AAA, Series L Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series L Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series L
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series L Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series L Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series L Shares, redeem or call for redemption,
      purchase or otherwise pay off, retire or make any return of capital in
      respect of any shares of Brookfield Properties ranking as to capital
      junior to the Class AAA, Series L
Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series L
      Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series L Shares;




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series L Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series L Shares
with respect to the payment of dividends have been declared, paid or set apart
for payment.




Modifications




The
provisions of the Class AAA, Series L Shares may be repealed, altered, modified
or amended from time to time with such prior approval of the holders of the
Class AAA, Series L Shares by special resolution, given in accordance with the
share provisions of the Class AAA, Series L Shares, in addition to any vote or
authorization required by law.




Voting




The
holders of the Class AAA, Series L Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series L
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series L
Shares, whether or not consecutive. In that event, and for only so long as any
such dividends remain in arrears, the holders of the Class AAA, Series L Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Series L Preference Share held.




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Specific
Provisions of the Class AAA Preference Shares, Series M




Dividends




The
holders of the Class AAA Preference Shares, Series M (the “Class AAA, Series M
Shares) are entitled to receive fixed cumulative preferential cash dividends,
if, as and when declared by the board of directors of Brookfield Properties, in
an amount per share equal to the sum of the 3-month Government of Canada
Treasury Bill Rate (on the 30th day
prior to the 1st day of
each of April, July, October and January in each year) plus 4.17% calculated on
the basis of the actual number of days elapsed in the period divided by 365,
then multiplied by C$25.00, accruing daily from the date of issue (less any tax
required to be deducted and withheld by Brookfield Properties), payable
quarterly on the last day of March, June, September and December in each
year.




Redemption




The Class
AAA, Series M Shares are not redeemable before September 30, 2014. On or after
that date, subject to the terms of any shares of Brookfield Properties ranking
prior to the Class AAA, Series M Shares, to applicable law and to the provisions
described under ‘‘Specific Provisions of the Class AAA Preference Shares, Series
M – Restrictions on Dividends and Retirement and Issue of Shares’’, Brookfield
Properties may, at its option, at any time redeem all, or from time to time any
part, of the outstanding Class AAA, Series M Shares, by the payment of an amount
in cash for each such share so redeemed equal to (i) C$25.00 in the case of
redemptions on September 30, 2019 and on September 30 every 5 years thereafter
or (ii) C$25.50 on any date after September 30, 2014, in each case including all
accrued and unpaid dividends (for greater certainty excluding declared dividends
with a record date prior to the date fixed for redemption) up to but excluding
the date fixed for redemption (less any tax required to be deducted and withheld
by Brookfield Properties), on not less than 30 days’ written
notice.




Conversion
at the Option of the Holder




Subject
to applicable law and the provisions of the Class AAA, Series M Shares, on and
after September 30, 2014 and every five years thereafter, the holders of each
Class AAA, Series M Share will have the right, at their option, to convert all
or any part of the outstanding Class AAA, Series M Share into Class AAA
Preference Shares, Series L on the basis of one (1) Class AAA Preference Share,
Series L for each Class AAA, Series M Share, on not less than 30 days’ written
notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series M – Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series M Shares at the
lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
M Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series M Shares. The holders of the Class
AAA, Series M Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series M Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series M
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series M Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series M Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series M Shares, redeem or call for redemption,
      purchase or otherwise pay off, retire or make any return of capital in
      respect of any shares of Brookfield Properties ranking as to capital
      junior to the Class AAA, Series M
Shares;




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(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series M
      Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series M Shares;




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series M Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series M Shares
with respect to the payment of dividends have been declared, paid or set apart
for payment.




Modifications




The
provisions of the Class AAA, Series M Shares may be repealed, altered, modified
or amended from time to time with such prior approval of the holders of the
Class AAA, Series M Shares by special resolution, given in accordance with the
share provisions of the Class AAA, Series M Shares, in addition to any vote or
authorization required by law.




Voting




The
holders of the Class AAA, Series M Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series M
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series M
Shares, whether or not consecutive. In that event, and for only so long as any
such dividends remain in arrears, the holders of the Class AAA, Series M Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Series M Preference Share held.




Specific
Provisions of the Class AAA Preference Shares, Series N




Dividends




The
holders of the Class AAA Preference Shares, Series N (the “Class AAA, Series N
Shares) are entitled to receive fixed cumulative preferential cash dividends,
if, as and when declared by the board of directors of Brookfield Properties, in
an amount equal to C$1.5375 per share per annum, accruing daily from the date of
issue (less any tax required to be deducted and withheld by Brookfield
Properties), payable quarterly on the last day of March, June, September and
December in each year.




Redemption




The Class
AAA, Series N Shares are not redeemable prior to June 30, 2016. On June 30, 2016
and on June 30 every five years thereafter, subject to the terms of any shares
of Brookfield Properties ranking prior to the Class AAA, Series N Shares, to
applicable law and to the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series N – Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may, at its option, at
any time redeem all, or from time to time any part, of the outstanding Class
AAA, Series N Shares, by the payment of an amount in cash for each such share so
redeemed equal to C$25.00 together with all accrued and unpaid dividends (for
greater certainty excluding declared dividends with a record date prior to the
date fixed for redemption) up to but excluding the date fixed for redemption
(less any tax required to be deducted and withheld by Brookfield Properties), on
not less than 30 days’ written notice.




Conversion
at the Option of the Holder




Subject
to applicable law and the provisions of the Class AAA, Series N Shares, on and
after June 30, 2016 and on June 30 every five years thereafter, the holders of
each Class AAA, Series N Share will have the right, at their option, to convert
all or any part of the outstanding Class AAA, Series N Share into Class AAA
Preference Shares, Series O on the basis of one (1) Class AAA Preference Share,
Series O for each Class AAA, Series N Share, on not less than 30 days’ written
notice.




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Purchase
for Cancellation




Subject
to applicable law and the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series N – Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series N Shares at the
lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
N Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series N Shares. The holders of the Class
AAA, Series N Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series N Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series N
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series N Shares) on any shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series N Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series N Shares, redeem or call for redemption,
      purchase or otherwise pay off, retire or make any return of capital in
      respect of any shares of Brookfield Properties ranking as to capital
      junior to the Class AAA, Series N
Shares;




(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series N
      Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series N Shares;




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series N Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series N Shares
with respect to the payment of dividends have been declared, paid or set apart
for payment.




Modifications




The
provisions of the Class AAA, Series N Shares may be repealed, altered, modified
or amended from time to time with such prior approval of the holders of the
Class AAA, Series N Shares by special resolution, given in accordance with the
share provisions of the Class AAA, Series N Shares, in addition to any vote or
authorization required by law.




Voting




The
holders of the Class AAA, Series N Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series N
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series N
Shares, whether or not consecutive. In that event, and for only so long as any
such dividends remain in arrears, the holders of the Class AAA, Series N Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Series N Preference Share held.




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Specific
Provisions of the Class AAA Preference Shares, Series O




Dividends




The
holders of the Class AAA Preference Shares, Series O (the “Class AAA, Series O
Shares) are entitled to receive floating rate cumulative preferential cash
dividends, if, as and when declared by the board of directors of Brookfield
Properties, in an amount per share equal to the sum of the 3-month Government of
Canada Treasury Bill Rate (on the 30th day
prior to the 1st day of
each of April, July, October and January in each year) plus 3.07% calculated on
the basis of the actual number of days elapsed in the period divided by 365,
then multiplied by C$25.00, accruing daily from the date of issue (less any tax
required to be deducted and withheld by Brookfield Properties), payable
quarterly on the last day of March, June, September and December in each
year.




Redemption




The Class
AAA, Series O Shares are not redeemable prior to June 30, 2016. On or after that
date, subject to the terms of any shares of Brookfield Properties ranking prior
to the Class AAA, Series O Shares, to applicable law and to the provisions
described under ‘‘Specific Provisions of the Class AAA Preference Shares, Series
O – Restrictions on Dividends and Retirement and Issue of Shares’’, Brookfield
Properties may, at its option, at any time redeem all, or from time to time any
part, of the outstanding Class AAA, Series O Shares, by the payment of an amount
in cash for each such share so redeemed equal to (i) C$25.00 in the case of
redemptions on June 30, 2016 and on June 30 every five years thereafter or (ii)
C$25.50 on any date after June 30, 2016, in each case including all accrued and
unpaid dividends (for greater certainty excluding declared dividends with a
record date prior to the date fixed for redemption) up to but excluding the date
fixed for redemption (less any tax required to be deducted and withheld by
Brookfield Properties), on not less than 30 days’ written notice.




Conversion
at the Option of the Holder




Subject
to applicable law and the provisions of the Class AAA, Series O Shares, on and
after June 30, 2016 and every five years thereafter, the holders of each Class
AAA, Series O Share will have the right, at their option, to convert all or any
part of the outstanding Class AAA, Series O Share into Class AAA Preference
Shares, Series N on the basis of one (1) Class AAA Preference Share, Series N
for each Class AAA, Series O Share, on not less than 30 days’ written
notice.




Purchase
for Cancellation




Subject
to applicable law and the provisions described under ‘‘Specific Provisions of
the Class AAA Preference Shares, Series O – Restrictions on Dividends and
Retirement and Issue of Shares’’, Brookfield Properties may at any time purchase
for cancellation the whole or any part of the Class AAA, Series O Shares at the
lowest price or prices at which in the opinion of the board of directors of
Brookfield Properties such shares are obtainable.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
for the purpose of winding up its affairs, the holders of the Class AAA, Series
O Shares will be entitled to payment of an amount equal to C$25.00 per share,
plus an amount equal to all accrued and unpaid dividends up to but excluding the
date fixed for payment or distribution (less any tax required to be deducted and
withheld by Brookfield Properties), before any amount is paid or any assets of
Brookfield Properties are distributed to the holders of any shares ranking
junior as to capital to the Class AAA, Series O Shares. The holders of the Class
AAA, Series O Shares will not be entitled to share in any further distribution
of the assets of Brookfield Properties.




Restriction
on Dividends and Retirement and Issue of Shares




So long
as any of the Class AAA, Series O Shares are outstanding, Brookfield Properties
will not, without the approval of the holders of the Class AAA, Series O
Shares:




(i)
            declare,
      pay or set apart for payment any dividends (other than stock dividends
      payable in shares of Brookfield Properties ranking as to capital and
      dividends junior to the Class AAA, Series O Shares) on shares of
      Brookfield Properties ranking as to dividends junior to the Class AAA,
      Series O Shares;




(ii)
            except
      out of the net cash proceeds of a substantially concurrent issue of shares
      of Brookfield Properties ranking as to return of capital and dividends
      junior to the Class AAA, Series O Shares, redeem or call for redemption,
      purchase or otherwise pay off, retire or make any return of capital in
      respect of any shares of Brookfield Properties ranking as to capital
      junior to the Class AAA, Series O
Shares;




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(iii)
            redeem
      or call for redemption, purchase or otherwise retire for value or make any
      return of capital in respect of less than all of the Class AAA, Series O
      Shares then outstanding;




(iv)
            except
      pursuant to any purchase obligation, sinking fund, retraction privilege or
      mandatory redemption provisions attaching thereto, redeem or call for
      redemption, purchase or otherwise pay off, retire or make any return of
      capital in respect of any Class AAA preference shares, ranking as to the
      payment of dividends or return of capital on a parity with the Class AAA,
      Series O Shares;




unless,
in each such case, all accrued and unpaid dividends up to and including the
dividend payable for the last completed period for which dividends were payable
on the Class AAA, Series O Shares and on all other shares of Brookfield
Properties ranking prior to or on a parity with the Class AAA, Series O Shares
with respect to the payment of dividends have been declared, paid or set apart
for payment.




Modifications




The
provisions of the Class AAA, Series O Shares may be repealed, altered, modified
or amended from time to time with such prior approval of the holders of the
Class AAA, Series O Shares by special resolution, given in accordance with the
share provisions of the Class AAA, Series O Shares, in addition to any vote or
authorization required by law.




Voting




The
holders of the Class AAA, Series O Shares will not be entitled (except as
otherwise provided by law and except for meetings of the holders of Class AAA
preference shares as a class and meetings of the holders of Class AAA, Series O
Shares as a series) to receive notice of, attend, or vote at, any meeting of
shareholders of Brookfield Properties unless and until Brookfield Properties
shall have failed to pay eight quarterly dividends on the Class AAA, Series O
Shares, whether or not consecutive. In that event, and for only so long as any
such dividends remain in arrears, the holders of the Class AAA, Series O Shares
will be entitled to receive notice of and to attend each meeting of Brookfield
Properties’ shareholders other than any meetings at which only holders of
another specified class or series are entitled to vote, and to one vote for each
Series O Preference Share held.




Common
Shares




Provisions
of Common Shares




Dividends




The
holders of the Common Shares are entitled to receive any dividends declared
thereon by the board of directors of Brookfield Properties.




Voting




The
holders of the Common Shares are entitled to receive notice of and to attend all
shareholders’ meetings and for all purposes will be entitled to one vote for
each Common Share held.




Liquidation,
Dissolution and Winding Up




In the
event of the liquidation, dissolution or winding up of Brookfield Properties or
any other distribution of assets of Brookfield Properties among its shareholders
by way of return of capital, the holders of Common Shares will be entitled to
receive, after distribution to the holders of the Class A preference
shares, the Class AA preference shares, the Class AAA preference shares and any
other shares ranking prior to the Common Shares, the remaining property of
Brookfield Properties.




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 80




APPENDIX
D - AUDIT COMMITTEE CHARTER




A
committee of the board of directors of the Corporation to be known as the Audit
Committee (the “Committee”) shall have the following terms of
reference:




Membership
and Chairperson




Following
each annual meeting of shareholders, the board of directors of the Corporation
(the “Board”) shall appoint from its number three or more directors (the
“Members” and each a “Member”) to serve on the Committee until the close of the
next annual meeting of shareholders of the Corporation or until the Member
ceases to be a director, resigns or is replaced, whichever occurs
first.




The
Members will be selected by the Board on the recommendation of the Governance
and Nominating Committee.  Any Member may be removed from office or
replaced at any time by the Board.  All of the Members will be
Independent Directors.  In addition, every Member will be Financially
Literate, or agree to become Financially Literate within a reasonable period of
time following appointment, and at least one Member will be an Audit Committee
Financial Expert.  Members may not serve on three or more other public
company audit committees, except with the prior approval of the
Board.




The Board
shall appoint one Member as the chairperson of the Committee.  If the
chairperson is absent from a meeting, the Members shall select a chairperson
from those in attendance to act as chairperson of the meeting.




Responsibilities




The
Committee shall:




a)
            be
      directly responsible for overseeing the work of the external auditor of
      the Corporation engaged for the purpose of preparing or issuing an
      auditor’s report or providing other audit, review or attest services to
      the Corporation (the “auditor”);




b)
            require
      the auditor to report directly to the
Committee;




c)
            review
      and evaluate the auditor’s independence, experience, qualifications and
      performance and determine whether the auditor should be appointed or
      re-appointed and recommend to the Board the auditor who should be
      nominated for appointment or re-appointment by the
      shareholders;




d)
            where
      appropriate, recommend to the Board that the shareholders terminate the
      auditor;




e)
            when
      a change of auditor is proposed, review all issues related to the change,
      including the information to be included in the notice of change of
      auditor required, and the orderly transition of such
    change;




f)
            review
      the terms of the auditor’s engagement and recommend to the Board the
      compensation of the auditor;




g)
            at
      least annually, obtain and review a report by the auditor
      describing:




·
            the
      auditor’s internal quality-control procedures;
  and




·
            any
      material issues raised by the most recent internal quality control review,
      or peer review, of the auditor, or review by any independent oversight
      body such as the Canadian Public Accountability Board or the Public
      Company Accounting Oversight Board, or governmental or professional
      authorities within the preceding five years respecting one or more
      independent audits carried out by the auditor, and the steps taken to deal
      with any issues raised in any such
review;




h)
            at
      least annually, confirm that the auditor has submitted a formal written
      statement describing all of its relationships with the Corporation;
      discuss with the auditor any disclosed relationships or services that may
      affect its objectivity and independence; obtain written confirmation from
      the auditor that it is objective within the meaning of the Rules of
      Professional Conduct/Code of Ethics adopted by the provincial institute or
      order of Chartered Accountants to which it belongs and is an independent
      public accountant within the meaning of the federal securities legislation
      administered by the United States Securities and Exchange Commission, and
      confirm that it has complied with applicable laws with the rotation of
      certain members of the audit engagement
team;




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i)
            review
      and evaluate the lead partner of the
auditor;




j)
            ensure
      the regular rotation of the audit engagement team members as required by
      law, and periodically consider whether there should be regular rotation of
      the audit firm;




k)
            meet
      privately with the auditor as frequently as the Committee feels is
      appropriate to fulfill its responsibilities, which will not be less
      frequently than annually, to discuss any items of concern to the Committee
      or the auditor, including:




·
            planning
      and staffing of the audit;




·
            any
      material written communications between the auditor and
      management;




·
            whether
      or not the auditor is satisfied with the quality and effectiveness of
      financial recording procedures and
systems;




·
            the
      extent to which the auditor is satisfied with the nature and scope of its
      examination;




·
            whether
      or not the auditor has received the full co-operation of management of the
      Corporation;




·
            the
      auditor’s opinion of the competence and performance of the Chief Financial
      Officer and other key financial
personnel;




·
            the
      items required to be communicated to the Committee in accordance with
      generally accepted auditing
standards;




·
            all
      critical accounting policies and practices to be used by the
      Corporation;




·
            all
      alternative treatments of financial information within generally accepted
      accounting principles that have been discussed with management,
      ramifications of the use of such alternative disclosures and treatments,
      and the treatment preferred by the
auditor;




·
            any
      difficulties encountered in the course of the audit work, any restrictions
      imposed on the scope of activities or access to requested information, any
      significant disagreements with management and management’s response;
      and




·
            any
      illegal act that may have occurred and the discovery of which is required
      to be disclosed to the Committee pursuant to paragraphs 5135.099 and
      5136.28 of the CICA Handbook and the United States Securities Exchange Act of
      1934.




l)
            pre-approve
      any non-audit service to be provided to the Corporation or any of its
      subsidiaries by the auditor in accordance with applicable
      law.  The Committee may delegate to one or more independent
      members the authority to pre-approve non-audit services to the extent
      permitted by applicable law. The pre-approval of non-audit services by any
      member to whom authority has been delegated must be presented to the full
      Committee at its first scheduled meeting following such pre-approval. The
      Committee may also adopt specific policies and procedures for the
      engagement of non-audit services provided these policies and procedures
      are detailed as to the particular services, mandate that the Committee be
      informed of each non-audit service and do not include the delegation of
      the Committee’s responsibilities to
management;




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m)
            resolve
      any disagreements between management and the auditor regarding financial
      reporting;




n)
            prior
      to the disclosure to the public, review, and, where appropriate, recommend
      for approval by the Board, the
following:




·
            audited
      annual financial statements, in conjunction with the report of the
      auditor;




·
            interim
      financial statements;




·
            annual
      and interim earnings press
releases;




·
            annual
      and interim management’s discussion and analysis of financial condition
      and results of operation;




·
            reconciliations
      of the annual or interim financial statement;
  and




·
            all
      other audited or unaudited financial information contained in public
      disclosure documents (including without limitation, any prospectus, or
      other offering or public disclosure documents and financial statements
      required by regulatory
authorities);




o)
            discuss
      press releases containing financial information (to ensure consistency of
      the disclosure to the financial statement), as well as financial
      information and earnings guidance provided to analysts and rating agencies
      including the use of “pro forma” or “adjusted” non-GAAP information in
      such press releases and financial information.  Such review may
      consist of a general discussion of the types of information to be
      disclosed or the types of presentations to be
  made;




p)
            review
      the effect of regulatory and accounting initiatives as well as off-balance
      sheet structures on the Corporation’s financial
  statements;




q)
            review
      disclosures made to the Committee by the Chief Executive Officer and Chief
      Financial Officer during their certification process for applicable
      securities law filings about any significant deficiencies and material
      weaknesses in the design or operation of the Corporation’s internal
      control over financial reporting which are reasonably likely to adversely
      affect the Corporation’s ability to record, process, summarize and report
      financial information, and any fraud involving management or other
      employees;




r)
            review
      the effectiveness of management’s policies and practices concerning
      financial reporting, any proposed changes in major accounting policies,
      the appointment and replacement of management responsible for financial
      reporting and the internal audit
function;




s)
            review
      the adequacy of the internal controls that have been adopted by the
      Corporation to safeguard assets from loss and unauthorized use and to
      verify the accuracy of the financial records and any special audit steps
      adopted in light of significant deficiencies and material weaknesses in
      internal control over financial
reporting;




t)
            meet
      privately with the person responsible for the Corporation’s internal audit
      function as frequently as the Committee feels appropriate to fulfill its
      responsibilities, which will not be less frequently than annually, to
      discuss any items of concern;




u)
            review
      the mandate, budget, planned activities, staffing and organizational
      structure of the internal audit function (which may be outsourced to a
      firm other than the auditor) to confirm that it is independent of
      management and has sufficient resources to carry out its
      mandate.  The Committee will discuss this mandate with the
      auditor, review the appointment and replacement of the person in charge of
      the Corporation’s internal audit function and review the significant
      reports to management prepared by the internal auditor and management’s
      responses;




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v)
            review
      the controls and procedures that have been adopted to confirm that
      material information about the Corporation and its subsidiaries that is
      required to be disclosed under applicable law or stock exchange rules is
      disclosed and to review the public disclosure of financial information
      extracted or derived from the issuer’s financial statements and
      periodically assess the adequacy of these
  procedures;




w)
            establish
      and periodically review the procedures for the receipt, follow-up,
      retention and treatment of complaints received by the Corporation about
      accounting, internal controls, disclosure controls or auditing matters and
      for the confidential, anonymous submission by employees of concerns
      regarding questionable accounting or auditing
  matters;




x)
            review
      periodically, the Corporation’s policies with respect to risk assessment
      and management, particularly financial risk exposure, including the steps
      taken to monitor and control risks;




y)
            review
      periodically, the status of taxation matters of the
      Corporation;




z)
            review
      and approve the Corporation’s policies for hiring partners and employees
      and former partners and employees of the present auditor and any former
      auditors of the Corporation;




aa)
            review,
      with legal counsel where required, such litigation, claims, tax
      assessments, transactions, inquiries from regulators and material
      inquiries from governmental agencies or other contingencies which may have
      a material impact on financial results or which may otherwise adversely
      affect the financial well-being of the Corporation;
  and




bb)
            consider
      other matters of a financial nature as directed by the
    Board.




Reporting




The
Committee will regularly report to the Board on:




·
            the
      auditor’s independence;




·
            the
      performance of the auditor and the Committee’s recommendations regarding
      its reappointment or termination;




·
            the
      performance of the internal audit function
  department;




·
            the
      adequacy of the Corporation’s internal controls and disclosure
      controls;




·
            its
      recommendations regarding the annual and interim financial statements of
      the Corporation and any reconciliation of the Corporation’s financial
      statements, including any issues with respect to the quality or integrity
      of the financial statements;




·
            its
      review of any other public disclosure document including the annual
      information form and the annual and interim management’s discussion and
      analysis of financial condition and results of
  operations;




·
            the
      Corporation’s compliance with legal and regulatory requirements,
      particularly those related to financial reporting;
  and




·
            all
      other significant matters it has addressed and with respect to such other
      matters that are within its
responsibilities.




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Review
and Disclosure




The
Committee will review this Charter at least annually and submit it to the
Governance and Nominating Committee together with any proposed
amendments.  The Governance and Nominating Committee will review the
Charter and submit it to the Board for approval with such further amendments as
it deems necessary and appropriate.





This
Charter will be posted on the Corporation’s Web site and the annual report of
the Corporation will state that this Charter is available on the Web site or is
available in print to any shareholder who requests a copy.





Assessment




At least
annually, the Governance and Nominating Committee will review the effectiveness
of this Committee in fulfilling its responsibilities and duties as set out in
this Charter and in a manner consistent with the corporate governance guidelines
adopted by the Board.





Access
To Outside Advisors And Senior Management




The
Committee may retain any outside advisor at the expense of the Corporation,
without the Board’s approval, at any time and has the authority to determine any
such advisor’s fees and other retention terms.





The
Corporation will provide for appropriate funding, for payment of compensation to
any auditor engaged to prepare or issue an audit report or perform other audit,
review or attest services, and ordinary administrative expenses of the
Committee.




Members
will meet privately with senior management as frequently as they feel is
appropriate to fulfill the Committee’s responsibilities, but not less than
annually.





Meetings




Meetings
of the Committee may be called by any Member, the Chairman of the Board, the
Chief Executive Officer or Chief Financial Officer of the Corporation or the
auditor.  Meetings will be held each quarter and at such additional
times as is necessary for the Committee to fulfill its
responsibilities.  The Committee shall appoint a secretary to be the
secretary of each meeting of the Committee and to maintain minutes of the
meeting and deliberations of the Committee.





The
powers of the Committee shall be exercisable at a meeting at which a quorum is
present.  A quorum shall be not less than a majority of the Members
from time to time.  Matters decided by the Committee shall be decided
by majority vote.  Subject to the foregoing, the Canada Business Corporations Actand the by-laws, and unless otherwise determined by the Board, the
Committee shall have the power to regulate its procedure.





Notice of
each meeting shall be given to the auditor, each Member, and to the Chairman of
the Board and the Chief Executive Officer of the Corporation.  Notice
of meeting may be given orally, in person or by telephone, by letter, by
facsimile or other electronic means not less than 24 hours before the time fixed
for the meeting.  Members may waive notice of any meeting and
attendance at a meeting is deemed waiver of notice.  The notice need
not state the purpose or purposes for which the meeting is being
held.





The
Committee may invite from time to time such persons as it may see fit to attend
its meetings and to take part in discussion and consideration of the affairs of
the Committee.  The Committee may require the auditors and/or members
of management to attend any or all meetings.





Definitions




Capitalized
terms used in this Charter and not otherwise defined have the meaning attributed
to them below:




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“Independent Director” means a
director who has been affirmatively determined by the Board to have no material
relationship with the Corporation, its parent or a subsidiary corporation,
either directly or as a partner, shareholder or officer of an organization that
has a relationship with the Corporation.  In addition, a director will
be deemed to have a material relationship if he or she has one of the following
relationships with the Corporation (which in each case below must be read as
including a parent company or subsidiary of the Corporation):




a)
            the
      director is or was within the last three years an employee or executive
      officer (or has an immediate family member who is or was within the last 3
      years an executive officer) of the Corporation.  A director is
      not disqualified from being independent if he or she previously acted as
      an interim chief executive officer of the Corporation, or currently acts
      or previously acted as a part-time chair or vice-chair of the Board or any
      Board committee;




b)
            the
      director (a) is a partner of or is employed by the Corporation’s internal
      or external auditor; (b) was within the last three years a partner or
      employee of that auditing firm and personally worked on the Corporation’s
      audit within that time; or (c) has a spouse, minor child or a child
      who lives in the director’s home and who (i) is a partner of the
      Corporation’s internal or external auditor; (ii) is an employee of
      the auditing firm and works in the audit, assurance or tax compliance (but
      not tax planning) practice; or (iii) was within the last three years
      a partner or employee of that auditing firm and personally worked on the
      Corporation’s audit during that time.  For this purpose, a
      “partner” does not include a partner whose interest in the auditing firm
      is limited to the receipt of fixed amounts of compensation (including
      deferred compensation) for prior service, if the compensation is not
      contingent in any way on continued
service;




c)
            the
      director is or was within the last three years (or has an immediate family
      member who is or was within the last three years) an executive officer of
      another entity if any of the Corporation’s current executive officers
      serve or served at the same time on the compensation committee of that
      entity;




d)
            the
      director has (or an immediate family member who is employed as an
      executive officer of the Corporation has) received more than Cdn. $75,000
      in direct compensation from the Corporation in any 12-month period within
      the last three years, other than (a) fees for acting as a director or
      committee member, including as the Chairperson of the Board or a Board
      committee; and (b) fixed amounts of compensation under a retirement or
      deferred compensation plan for prior service with the Corporation, if
      receipt is not contingent in any way on continued service;
    or




e)
            the
      director is an employee of (or has an immediate family member who is an
      executive officer of), another company that has, in the last three fiscal
      years, made payments to, or received payments from, the Corporation in
      excess of the greater of US $1 million and 2% of the other company’s
      consolidated gross revenues.




For the
purposes of the definition above, the term “executive officer” means the chair,
vice-chair, president, vice-presidents in charge of principal business units,
divisions or functions, and any other individual (whether employed by the
Corporation or not) who performs a policy-making function in respect of the
Corporation, and the term “immediate family member” means the director’s spouse,
parents, children, siblings, mothers- and fathers-in-law, sons- and
daughters-in-law, brothers and sisters-in-law and anyone (other than a domestic
employee) who lives in the director's home.




Additionally,
members of the Audit Committee are subject to two additional requirements to be
considered independent for audit committee purposes:




a)
            the
      director cannot after appointment to the Audit Committee accept, directly
      or indirectly, any consulting, advisory, or other compensatory fee from
      the Corporation or any of its subsidiaries, other than (a) fees for acting
      as a director, committee member, or part-time chair or vice-chair of the
      Board or any Board Committee; and (b) fixed amounts of compensation under
      a retirement or deferred compensation plan for prior service with the
      Corporation (provided such compensation is not contingent in any way on
      continued service).  A fee is considered to have been indirectly
      received by the director if it is received by (a) the director’s
      spouse, a minor child or a child who lives in the director’s home; or
      (b) an entity in which the director is a partner, a member or an
      officer (such as a managing director or executive officer) if that entity
      provides accounting, consulting, legal, investment banking or financial
      advisory services to the Corporation or any of its subsidiaries, unless
      the director is a limited partner or a non-managing member of the entity
      and plays no active role in providing services to the entity;
      and




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b)
            the
      director cannot be an affiliated entity of the Corporation or any of its
      subsidiaries.




For the
purposes of the Audit Committee requirements above, the term “affiliated entity”
means an individual or company that controls, is controlled by or is under
common control with the Corporation.  In addition, an individual is
himself or herself an affiliated entity of the Corporation if the individual
holds any of the following positions with an affiliated entity:  a
director who is an employee, an executive officer, a general partner or a
managing member, and the term “control” means having the direct or indirect
power to control the Corporation, whether through ownership of voting securities
or otherwise.  An individual who owns, directly or indirectly, 10% or
less of any class of voting securities of the Corporation will be deemed not to
control the Corporation if the individual is not an executive officer of the
Corporation.





“Financially Literate” means
the ability to read and understand a set of financial statements that present a
breadth and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of the issues that can reasonably be
expected to be raised by the Corporation’s financial statements.





“Audit Committee Financial Expert”means a person who has the following attributes:





a)
            an
      understanding of generally accepted accounting principles and financial
      statements;




b)
            the
      ability to assess the general application of such principles in connection
      with the accounting for estimates, accruals and
  reserves;




c)
            experience
      preparing, auditing, analyzing or evaluating financial statements that
      present a breadth and level of complexity of accounting issues that are
      generally comparable to the breadth and complexity of issues that can
      reasonably be expected to be raised by the Corporation’s financial
      statements, or experience actively supervising one or more persons engaged
      in such activities;




d)
            an
      understanding of internal controls and procedures for financial reporting;
      and




e)
            an
      understanding of audit committee
functions;




acquired
through any one or more of the following:




a)
            education
      and experience as a principal financial officer, principal accounting
      officer, controller, public accountant or auditor or experience in one or
      more positions that involve the performance of similar
      functions;




b)
            experience
      actively supervising a principal financial officer, principal accounting
      officer, controller, public accountant, auditor or person performing
      similar functions;




c)
            experience
      overseeing or assessing the performance of companies or public accountants
      with respect to the preparation, auditing or evaluation of financial
      statements; or




d)
            other
      relevant experience.







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