##### 



(BROOKFIELD LOGO) NEWS RELEASE BROOKFIELD REPORTS 45% INCREASE
IN FUNDS FROM OPERATIONS NEW YORK, November 1, 2004 Brookfield Properties Corporation (BPO: NYSE, TSX)
today announced strong financial results for the third quarter ended September
30, 2004. For the nine months ended September 30, 2004, Brookfields funds from
operations increased by 45% to $2.30 per share from $1.59 per share during the
same period in 2003. Funds from operations prior to lease termination income
increased by 21% to $1.92 per share from $1.59 per share during the same period
in 2003. Net income increased by 14% to $1.00 per share from $0.88 per share
during the same period in 2003. Three Months Ended
    
    Nine Months Ended(Millions, except
    
    Sept. 30
    
    Sept. 30per share amounts)
    
    2004
    
    2003
    
    2004
    
    2003Funds from operations
    
    $
    108
    
    
    $
    91
    
    
    $
    390
    
    
    $
    267- per share
    
    $
    0.62
    
    
    $
    0.55
    
    
    $
    2.30
    
    
    $
    1.59Net income
    
    $
    50
    
    
    $
    50
    
    
    $
    186
    
    
    $
    153- per share
    
    $
    0.25
    
    
    $
    0.29
    
    
    $
    1.00
    
    
    $
    0.88
 For the three months ended September 30, 2004, Brookfields funds from
operations increased by 13% to $0.62 per share from $0.55 per share during the
same period in 2003. Net income of $50 million was consistent with the same
period in 2003. With another quarter of solid financial results, Brookfield continues to
execute its value-added strategy through the accretive deployment of capital
into premier properties in high-growth markets, said Ric Clark, President and
CEO of Brookfield.




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MAJOR INITIATIVES IN THE THIRD QUARTER OF 2004  
    
    Acquired Potomac Towerin the Washington, D.C. market from Deutsche
Immobilien Fonds AG (DIFA) for $106 million. The 19-story office
tower located on the Potomac River in Rosslyn, Virginia, offers
unobstructed views of the Washington, D.C. skyline. It measures
238,000 rentable square feet of office space and has a 165,000 square
foot eight-level parking garage. The building is 100% leased. During
the past ten months, Brookfield has assembled a high-quality
Washington, D.C. area portfolio comprising 1.5 million square feet
which includes this asset, 701 Ninth St., N.W. and 1625 Eye St., N.W.
    
    Financed 1625 Eye Street, N.W., Washington, D.C., with a $130 million,
ten-year, 6.0% fixed rate mortgage. The financing is comprised of
two-stage funding, with $74 million funded in September 2004, and
additional proceeds of $56 million available upon future lease-up.
    
    Acquired a $27 million, seven-year, 11.2% fixed rate mezzanine debt
investmentfor the Bank of America Center, San Franciscos premiere
office property, which comprises the junior-most tier of a $750
million financing for the 1.78 million square foot tower.
    
    Completed the issue of C$150 million Class AAA Series K preferred
sharesat a dividend rate of 5.2%. The proceeds were used for general
corporate purposes including the repayment of existing floating rate
preferred shares and debt.
    
    Repurchased 1.1 million common shares year-to-dateat an average price
of $28.84 per share. In addition, the normal course issuer bid was
renewed, permitting the company to acquire up to 7.8 million common
            shares during the period September 15, 2004 to September 14, 2005.
Since the inception of the normal course issuer bid in 1999, 11.9
million shares have been repurchased at an average price of $19.27 per
share. OPERATING HIGHLIGHTS The majority of Brookfields markets continue to improve, as evidenced by a
modest increase in job growth statistics, particularly in financial and
professional services sectors. The result has been an increase in leasing
demand and a decrease in vacancy rates. At September 30, 2004, the company had
an occupancy rate of 96.5% in its core markets of New York, Boston, Washington,
D.C., Toronto and Calgary, and an occupancy rate of 93.9% across the portfolio.
Operating highlights for the third quarter included:  
    
    Increased commercial property operating income by $17 million.During
the third quarter of 2004, net operating income from commercial property
operations was $168 million, compared with $151 million during the same
period in 2003. This continued strong performance was driven by the
companys relatively low vacancy during the last two years and the
addition to the current property portfolio of 300 Madison, 1625 Eye St.,
and 701 9th Street.




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##### 




    
    Leased approximately 800,000 square feetof space since the end of the
second quarter of 2004, including:Toronto  
    
    A 10-year lease renewal with Canadian Imperial Bank of Commerce for
331,000 square feet at Atrium on Bay;  Washington, D.C.  
    
    A new 10-year lease with the Federal Housing Finance Board for 70,000
square feet at 1625 Eye St., N.W., subsequent to the end of the third
quarter, bringing the property occupancy rate up to 73%;  Calgary  
    
    A new six-year lease with Imperial Oil for 68,000 square feet at Fifth
Avenue Place;
    
    A 10-year renewal and expansion with management consulting firm Towers
Perrin for 49,000 square feet at Petro-Canada Centre;  New York  
    
    A 16-year lease expansion with Cleary Gottlieb for 44,000 square feet at
One Liberty Plaza;
    
    A new 10-year lease with Computer Generated Solutions, a firm relocating
from midtown Manhattan, for 40,000 square feet at Three World Financial
Center, subsequent to the end of the third quarter; and  Boston  
    
    A five-year lease renewal with Citigroup Capital Markets for 41,000 sq.
ft. at 53 State Street.  This brings Brookfields year-to-date leasing total to approximately 2.5
million square feet, representing approximately four
times the amount of space contractually expiring.
    
    Earned $11 million from residential land development operations, an
increase of $4 million over the third quarter of 2003, as low interest
rates and continued strong demand continue to fuel the North American
housing market. OUTLOOK In a recovering office market, Brookfield remains well-positioned for growth
with our premier quality assets, significant liquidity and long-term lease
profile. Sustained job growth is the key to the future and for the first time
in four years, the momentum is moving in the right direction. Looking forward,
we remain optimistic, concluded Clark. ***********




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Change in Accounting Policy Historically, Brookfields accounting policy has been to record revenues in
accordance with the actual payments received under the terms of the companys
leases, which typically increase over time, and to record depreciation on a
sinking-fund basis. However, commencing January 1, 2004, accounting standards
require both straight-line rent recognition and straight-line depreciation.
This change resulted in additional revenue of $16 million and additional
depreciation of $43 million before the effect of taxes for the nine months
ended September 30, 2004 ($6 million of additional revenue and $15 million of
additional depreciation for the three months ended September 30, 2004). A
schedule reconciling FFO to a non straight-line rent basis can be found in the
supplemental information package to allow for comparability with prior periods. Dividend Declaration The Board of Directors of Brookfield declared a quarterly common share dividend
of $0.16 per share payable on December 31, 2004 to shareholders of record at
the close of business on December 1, 2004. Shareholders resident in the United
States will receive payment in U.S. dollars and shareholders resident in Canada
will receive their dividends in Canadian dollars at the exchange rate on the
record date, unless they elect otherwise. The quarterly dividends payable for
the Class AAA, Series F, G, H, I, J and K preferred shares were also declared
payable on December 31, 2004 to shareholders of record at the close of business
on December 15, 2004. Conference Call Brookfields third quarter investor conference call can be accessed by
teleconference on November 1, 2004 at 11:00 a.m. E.T. at 877-461-2814 or at
416-695-9753. The call will be archived through December 1, 2004 and can be
accessed by dialing toll free 888-509-0081 or 416-695-5275. The conference
call can also be accessed by Webcast on the Brookfield Web site at
www.brookfieldproperties.com. Supplemental Information Investors, analysts and other interested parties can access Brookfields
Supplemental Information Package on Brookfields Web site under the Investor
Information/Financial Reports section. This additional financial information
should be read in conjunction with this press release. Brookfield Profile Brookfield Properties Corporation owns, develops and manages premier North
American office properties. The Brookfield portfolio comprises 47 commercial
properties and development sites totaling 46 million square feet, including
landmark properties such as the World Financial Center in New York and BCE
Place in Toronto. Brookfield is inter-listed on the New York and Toronto Stock
Exchanges under the symbol BPO. Contact Melissa Coley, Vice President, Investor Relations and Communications, tel.
(212) 4177215, or via email at: mcoley@brookfieldproperties.com. ***********




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##### 



Note: This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The words believe,
expect, anticipate, intend, estimate, and other expressions which are
predictions of or indicate future events and trends and which do not relate to
historical matters, identify forward looking statements. Reliance should not be
placed on forward-looking statements because they involve known and unknown
risks, uncertainties and other factors, which may cause the actual results,
performance or achievements of the company to differ materially from
anticipated future results, performance or achievement expressed or implied by
such forward-looking statements. Factors that could cause actual results to
differ materially from those set forward in the forward-looking statements
include general economic conditions, local real estate conditions, timely
re-leasing of occupied square footage upon expiration, interest rates,
availability of equity and debt financing and other risks detailed from time to
time in the documents filed by the company with the securities regulators in
Canada and the United States. The company undertakes no obligation to publicly
update or revise any forward looking statements, whether as a result of new
information, future events or otherwise.




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##### 



CONSOLIDATED STATEMENT OF INCOME Three months ended
    
    Nine months endedSeptember 30
    
    September 30(US Millions, except per share amounts)
    
    2004
    
    2003
    
    2004
    
    2003Total revenue
    
    $
    345
    
    
    $
    320
    
    
    $
    1,052
    
    
    $
    916Net operating incomeCommercial property operationsOperating income from properties
    
    $
    168
    
    
    $
    151
    
    
    $
    513
    
    
    $
    453Lease termination income
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    Total commercial property operations
    
    
    168
    
    
    
    151
    
    
    
    573
    
    
    
    453Development and residential operations
    
    
    11
    
    
    
    7
    
    
    
    29
    
    
    
    21Interest and other
    
    
    11
    
    
    
    16
    
    
    
    36
    
    
    
    45190
    
    
    
    174
    
    
    
    638
    
    
    
    519ExpensesInterest
    
    
    67
    
    
    
    66
    
    
    
    201
    
    
    
    203Administrative and development
    
    
    10
    
    
    
    11
    
    
    
    31
    
    
    
    33Interests of others in properties
    
    
    5
    
    
    
    6
    
    
    
    16
    
    
    
    16Income before non-cash items
    
    
    108
    
    
    
    91
    
    
    
    390
    
    
    
    267Depreciation and amortization
    
    
    36
    
    
    
    20
    
    
    
    105
    
    
    
    58Taxes and other non-cash items
    
    
    22
    
    
    
    21
    
    
    
    99
    
    
    
    56Net income
    
    $
    50
    
    
    $
    50
    
    
    $
    186
    
    
    $
    153Funds from operations per share  dilutedPrior to lease termination income
    
    $
    0.62
    
    
    $
    0.55
    
    
    $
    1.92
    
    
    $
    1.59Lease termination income
    
    
    
    
    
    
    
    
    
    
    0.38
    
    
    
    $
    0.62
    
    
    $
    0.55
    
    
    $
    2.30
    
    
    $
    1.59Net income per share  dilutedPrior to lease termination income
    
    $
    0.25
    
    
    $
    0.29
    
    
    $
    0.78
    
    
    $
    0.88Lease termination income
    
    
    
    
    
    
    
    
    
    
    0.22
    
    
    
    $
    0.25
    
    
    $
    0.29
    
    
    $
    1.00
    
    
    $
    0.88




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##### 



CONSOLIDATED BALANCE SHEET (US Millions)
    September 30, 2004
    December 31, 2003AssetsCommercial properties
    
    $
    6,626
    
    
    $
    6,297Development properties
    
    
    691
    
    
    
    684Receivables and other
    
    
    691
    
    
    
    717Marketable securities
    
    
    286
    
    
    
    267Cash and cash equivalents
    
    
    96
    
    
    
    132$
    8,390
    
    
    $
    8,097LiabilitiesCommercial property debt
    
    $
    4,524
    
    
    $
    4,537Accounts payable and other liabilities
    
    
    551
    
    
    
    545Future income tax liability
    
    
    106
    
    
    
    18Shareholders interestsInterests of others in properties
    
    
    50
    
    
    
    81Preferred sharesSubsidiaries
    
    
    425
    
    
    
    415Corporate
    
    
    732
    
    
    
    586Common shares
    
    
    2,002
    
    
    
    1,915$
    8,390
    
    
    $
    8,097
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