EDGAR 10-K Filing

Company CIK: 1496048
Filing Year: 2021
Filename: 1496048_10-K_2021_0001496048-21-000006.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
The following discussion should be read in conjunction with the Consolidated Financial Statements of Brookfield Property REIT Inc., formerly known as GGP Inc. ("BPYU" or the "Company"), and related notes, as included in this Annual Report on Form 10-K (this "Annual Report"). The terms "we", "us" and "our" may also be used to refer to BPYU and its subsidiaries. BPYU, a Delaware corporation, was organized in July 2010 and is an externally-managed real estate investment trust, referred to as a "REIT". BPYU is a subsidiary of Brookfield Property Partners L.P. ("BPY").
On July 26, 2018, the Company’s stockholders approved a series of transactions (collectively, the "BPY Transaction") pursuant to which, among other things, (i) BPY would exchange all of its shares of the Company’s common stock owned by certain affiliates of BPY and any subsidiary of the Company for shares of a newly authorized series of preferred stock of the Company designated Series B Preferred Stock (the "Class B Exchange"), (ii) the Company’s certificate of incorporation would be amended and restated to, among other things, change the Company’s name from GGP Inc. to Brookfield Property REIT Inc. and authorize the issuance of Class A Stock, par value $0.01 per share ("Class A Stock"), Class B-1 Stock, par value $0.01 per share ("Class B-1 Stock") and Class C Stock, par value $0.01 per share ("Class C Stock") and to provide the terms governing such stock, and (iii) a special dividend would be paid to all holders of record of the Company’s common stock (not including holders of restricted stock, but including certain holders of options who were deemed stockholders) following the Class B Exchange (the "Pre-Closing Dividend"). The Pre-Closing Dividend would consist of a distribution of up to $23.50 in cash or a choice of either one BPY limited partnership unit ("BPY unit") or one share of Class A Stock, subject to proration in each case, based on an aggregate cash consideration amount of $9.25 billion. Each share of Class A Stock would be intended to provide an economic return equivalent to one BPY unit, and would be exchangeable for one BPY unit or its cash equivalent. The BPY Transaction was completed on August 28, 2018. All references in this report to "BPYU" or the "Company" prior to such date refer to the Company prior to the effect of the BPY Transaction.
On January 4, 2021, Brookfield Asset Management Inc. ("Brookfield Asset Management" or "BAM") announced a proposal to BPY to acquire all of the limited partnership units of BPY ("BPY units") that it does not already own at a value of $16.50 per BPY unit, or $5.9 billion in total value (the "BAM Proposal"). Under the BAM Proposal, BPY unitholders would have the ability to elect to receive, per BPY unit, a combination of (i) 0.40 BAM Class A limited voting shares ("Brookfield Shares"), (ii) $16.50 in cash, and/or (iii) 0.66 of BPY preferred units with a liquidation preference of $25.00 per unit ("New Preferred Units"), subject in each case to pro-ration based on a maximum of $59.5 million Brookfield Shares (42% of the total value of BPY Units), maximum cash consideration of $2.95 billion (50% of the total value of BPY Units), and a maximum value of $500 million in New Preferred Units (8% of the total value of the Units. If unitholders collectively elect to receive in excess of $500 million in New Preferred Units, the amount of New Preferred Units can increase to a maximum of $1 billion, offset against the maximum amount of Brookfield Shares. The maximum amount of cash consideration would not be affected.
Under the BAM Proposal, holders of Class A stock would be entitled to receive the same per share consideration as BPY unitholders upon exchange of their shares into BPY units. It is also expected that the BPYU 6.375% Series A Cumulative Redeemable Preferred Stock would be redeemed at its par value of $25.00 per share in connection with the proposed transaction. The board of directors of the BPY General Partner has established a special committee to evaluate and respond to the BAM Proposal.
Our Company and Strategy
BPYU (Nasdaq: BPYU) is a subsidiary of BPY (Nasdaq: BPY; TSX: BPY.UN); one of the world’s largest commercial real estate companies, with approximately $88 billion in total assets. BPYU's Class A Stock was created as a public security that is intended to offer economic equivalence to an investment in BPY in the form of a U.S. REIT stock. BPY owns and operates iconic properties in the world’s major markets and its global portfolio includes office, retail, multifamily, logistics, hospitality, triple net lease, manufactured housing, mixed-use and student housing.
Although BPYU only owns a subset of BPY’s portfolio, namely its Core Retail portfolio, shares of Class A Stock have been structured to provide an economic return equivalent to that of BPY units and therefore the market price of the Class A Stock will be significantly impacted by the combined business performance of BPY as a whole and the market price of the BPY units. In making an investment decision relating to BPYU’s securities, you should carefully consult the documents prepared by BPY. See "Available Information" and Item 5 "Market for Registrants Common Equity, Related Stockholder Matters and Insider Purchases of Equity Securities" for further information regarding BPY, including trading information with respect to BPY’s units.
BPYU directly owns a property portfolio comprised primarily of Class A retail properties (defined primarily by sales per square foot). As of December 31, 2020, we owned, either entirely or with joint venture partners, 121 retail properties located throughout the United States comprising approximately 120 million square feet of gross leasable area ("GLA").
Our primary objective is to be an owner and operator of best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers and consumers. We aim to operate our business to achieve this objective with a long term view and will continue to make decisions with that in mind, however, we will caution that in light of the novel coronavirus pandemic ("COVID-19" or "the global economic shutdown" or the "shutdown") and its impact on the global economy, we may be unable to achieve these objectives in the near term.
Our strategy includes:
•increasing the permanent occupancy of our regional mall portfolio by converting temporary leases to permanent leases and leasing vacant space;
•renewing or replacing expiring leases at greater rental rates;
•actively recycling capital through the disposition of assets, investing in whole or partial interests in high-quality regional malls, anchor pads and our development pipeline and repaying debt; and
•continuing to execute on our existing redevelopment projects and seeking additional opportunities within our portfolio for redevelopment.
As of December 31, 2020, our portfolio was 92.5% leased, compared to 96.4% leased at December 31, 2019. On a suite-to-suite basis, the leases commencing in the trailing 12 months exhibited initial rents that were 1.1% higher than the final rents paid on expiring leases.
A portion of our portfolio is owned through joint venture, partnership or other arrangements with institutional partners. Prospectively, as we recycle capital, our preference is to sell down interests in assets to institutional partners and to continue to manage the assets on behalf of ourselves and the investors. We believe that this strategy enables us to enhance returns on our capital through associated fees, which represent an important area of growth.
Our redevelopment pipeline is a significant component of value of our business. We have redevelopment activities with an estimated cost to the company totaling approximately $449.0 million in the pipeline. We continue to evaluate a number of other redevelopment projects to further enhance the quality of our assets.
Segments
BPYU operates in a single reportable segment, which includes the operation, development and management of retail and other rental properties. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual property operating results are reviewed and discrete financial information is available. The Company's chief operating decision maker is comprised of a team of several members of executive management who use property operations in assessing segment operating performance. We do not distinguish or group our consolidated operations based on geography, size or type for purposes of making property operating decisions. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. There are no individual operating segments that are greater than 10% of combined revenue or combined assets. When assessing segment operating performance, certain non-cash and non-comparable items such as straight-line rent, depreciation expense and intangible asset and liability amortization, are excluded from property operations, which are a result of our emergence, acquisition accounting and other capital contribution or restructuring events. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company's operating properties are aggregated into a single reportable segment.
Customers
For the year ended December 31, 2020, our largest tenant, L Brands, Inc. (based on common parent ownership), accounted for approximately 4.1% of rents. Our three largest tenants, L Brands, Inc., Foot Locker, Inc., and LVMH, in aggregate, comprised approximately 10.1% of rents.
Competition
Competition within the retail property sector is strong. We compete for tenants and visitors to our malls with other malls in close proximity as well as online retailers. We believe the high-quality of our properties enables us to compete effectively for retailers and consumers. In order to maintain and increase our competitive position within a marketplace we:
•strategically locate tenants within each property to achieve a merchandising strategy that promotes traffic, cross-shopping and maximizes sales;
•introduce new concepts to the property which may include restaurants, theaters, grocery stores, first-to-market retailers, and e-commerce retailers;
•utilize our properties with the opportunities to add other potential uses such as residential, hospitality and office space to complement our retail experience;
•invest capital to provide the right environment for our tenants and consumers, including aesthetic, technological, and infrastructure improvements; and
•ensure our properties are clean, secure and comfortable.
Governmental Regulations
Compliance with various governmental regulations has an impact on the Company's business, including its capital expenditures, earnings and competitive position, which can be material. The Company incurs costs to monitor, and takes actions to comply with, governmental regulations that are applicable to its business, which include, among others, federal securities laws and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health and safety laws and regulations, local zoning, usage and other regulations relating to real property, the Americans with Disabilities Act of 1990 and related laws and regulations.
See “Item 1A - Risk Factors” for a discussion of material risks to the Company, including, to the extent material, to its competitive position, relating to governmental regulations, and see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation” together with the Company's Consolidated Financial Statements, including the related notes included therein, for a discussion of material information relevant to an assessment of the Company's financial condition and results of operations, including, to the extent material, the effects that compliance with governmental regulations may have upon its capital expenditures and earnings.
Seasonality
Although BPYU has a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the fourth quarter of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.
Human Capital
While certain of our subsidiaries have employees, BPYU does not have any employees. BPYU has entered into a Master Services Agreement dated August 27, 2018, among Brookfield Asset Management, the Company and certain other parties thereto (the "Master Services Agreement") pursuant to which each service provider and certain other affiliates of Brookfield Asset Management provide, or arrange for other service providers to provide, day-to-day management and administrative services for our Company. See Exhibit 10.16 for this Master Service Agreement.
Insurance
BPYU has comprehensive liability, property and rental loss insurance with respect to our portfolio of properties. We believe that such insurance provides adequate coverage.
See Item 1A - "Risk Factors" for additional discussion of insurance matters.
Qualification as a REIT
BPYU intends to maintain REIT status, and therefore our operations generally will not be subject to federal income tax on real estate investment trust taxable income. A schedule detailing the taxability of dividends for 2020, 2019 and 2018 has been presented in Note 8.
Available Information
Information regarding BPY can be accessed on its Internet website at bpy.brookfield.com and information regarding BPYU can be accessed on its Internet website at bpy.brookfield.com/bpyu. BPY is subject to the information and periodic reporting requirements of the Exchange Act and fulfills the obligations with respect to those requirements by filing reports with the Securities and Exchange Commission (the "SEC"). In addition, BPY is required to file documents with the securities regulatory authority in each of the provinces and territories in Canada. Annual Reports, Quarterly Reports, Interactive Data Files and other SEC filings for both BPY and BPYU are available and may be accessed free of charge through the Investors section of their respective Internet websites under the "Reports & Filings" subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. BPY’s and BPYU’s Internet websites and included or linked information on the websites are not intended to be incorporated into this Annual Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be accessed at www.sec.gov. In addition, BPY’s filings are electronically available from the Canadian System for Electronic Document Analysis and Retrieval (SEDAR), at www.sedar.com, the Canadian equivalent of the SEC electronic document gathering and retrieval system.
The information found on, or accessible through, the website set forth above is not incorporated into and does not form a part of this Form 10-K.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
You should carefully consider the following factors in addition to the other information set forth in this Form 10-K. If any of the following risks actually occur, our business, financial condition and results of operations and the value of the Class A Stock securities would likely suffer. Each share of Class A Stock has been structured with the intention of providing an economic return equivalent to one BPY unit. We therefore expect that the market price of the Class A Stock will be significantly impacted by the market price of the BPY units and the combined business performance of BPY as a whole. In addition to carefully considering the risks factors contained in this Annual Report relating to BPYU’s assets, organizational structure and securities, you should carefully consider the risk factors applicable to BPY’s business and an investment in BPY units, which are included in BPY’s Annual Report on Form 20-F. For additional information regarding BPY, see "Our Company and Strategy" and "Available Information".
Organization and Ownership Risks
Class A Stock may not trade at the same price as the BPY units.
Although the Class A Stock is intended to provide an economic return that is equivalent to BPY units, there can be no assurance
that the market price of Class A Stock will be equal to the market price of BPY units at any time. Factors that could cause differences in such market prices may include:
•perception and/or recommendations by analysts, investors and/or other third parties that these securities should be priced differently;
•actual or perceived differences in distributions to holders of Class A Stock versus BPY unitholders, including as a result of any legal prohibitions;
•business developments or financial performance or other events or conditions that may be specific to only BPYU or BPY; and
•difficulty in the exchange mechanics between Class A Stock and BPY units, including the potential expiration or termination of the Rights Agreement, dated as of April 27, 2018 by and between BAM and Wilmington Trust, National Association, in accordance with its terms.
Holders of Class A Stock may not receive the same distributions as holders of BPY units, and, accordingly, may not receive the intended economic equivalence of the securities.
BPYU intends to pay identical distributions in respect of the Class A Stock as BPY distributes to BPY unitholders. However, unforeseen circumstances (including legal prohibitions) may prevent the same distributions from being paid on each security. Accordingly, there can be no assurance that distributions will be identical for Class A Stock and BPY units in the future, which may impact the market price of these securities.
If a sufficient amount of Class A Stock is exchanged for BPY units, then Class A Stock may be de-listed.
Shares of Class A Stock began trading on Nasdaq following the consummation of the BPY Transaction. However, if a sufficient amount of Class A Stock is exchanged for BPY units, BPYU may fail to meet the minimum listing requirements on the Nasdaq and Nasdaq may take steps to de-list the Class A Stock. This, in turn, would have a significant adverse effect on the liquidity of the Class A Stock, and holders thereof may not be able to exit their investments on favorable terms, or at all.
Additionally, if the market capitalization of Class A Stock (i.e., if the price per share of Class A Stock, multiplied by the number of shares of Class A Stock outstanding) averages less than $1,000,000,000 over any period of thirty (30) consecutive trading days, the Company's Board of Directors will have the right to liquidate BPYU’s assets and wind up BPYU’s operations, which we refer to as a market capitalization liquidation event. Upon any market capitalization liquidation event, and subject to the prior rights of holders of the BPYU Series A Preferred Stock and after the payment in full to any holder of BPYU Class A Stock that has exercised its exchange rights, the holders of Class A Stock shall be entitled to a cash amount, for each share of Class A Stock, equal to the dollar volume-weighted average price of one BPY unit over the ten (10) trading days immediately following the public announcement of such market capitalization liquidation event, plus all declared and unpaid dividends. If, upon any such market capitalization liquidation event, the assets of BPYU are insufficient to make such payment in full, then the assets of BPYU will be distributed among the holders of Class A Stock ratably in proportion to the full amounts to which they would otherwise be respectively entitled to receive. Notwithstanding the foregoing, upon any market capitalization liquidation event, BPY or an affiliate of BPY may elect to exchange all of the outstanding shares of Class A Stock for BPY units on a one-for-one basis. This initial one-for-one conversion factor is subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU. Such a forced exchange of the Class A Stock for cash or BPY units could have a negative impact on the BPYU stockholder’s investment, including adverse tax consequences.
The market price of Class A Stock and BPY units may be volatile, and holders of Class A Stock could lose a significant portion of their investment due to drops in the market price of Class A Stock.
The market price of shares of Class A Stock and BPY units may be volatile, and holders of Class A Stock may not be able to resell their shares at or above the implied price at which they acquired such securities due to fluctuations in the market price of Class A Stock, including changes in market price caused by factors unrelated to BPYU or BPY’s operating performance or prospects. Specific factors that may have a significant effect on the market price of Class A Stock include, among others, the following:
•changes in stock market analyst recommendations or earnings estimates regarding the Class A Stock and/or BPY units,
other companies comparable to BPYU or BPY or companies in the industries they serve;
•changes in the market price of BPY units;
•actual or anticipated fluctuations in BPY’s or BPYU’s operating results or future prospects;
•reactions to public announcements by BPY and BPYU;
•strategic actions taken by BPY, BPYU and/or their competitors;
•adverse conditions in the financial market or general U.S. or international economic conditions, including those resulting from war, incidents of terrorism, pandemics/epidemics and responses to such events; and
•sales of such securities by BPY, BPYU and/or members of their management team or significant stockholders.
Investors in Class A Stock will be affected by BPY’s performance, including the performance of assets of BPY that are not assets of BPYU. There can be no assurance that BPY will be able to continue paying distributions equal to the level currently paid by BPY, or that BPYU will be able to pay all of the distributions intended to be payable on the Class A Stock.
Each share of Class A Stock is intended to provide an economic return equivalent to one BPY unit, and at any time from and after the date of the issuance of the Class A Stock, such stockholder may cause BPYU to redeem a share of Class A Stock for an amount of cash equivalent to the value of a BPY unit or such share shall be exchanged for a BPY unit. Therefore, investors in Class A Stock will be affected by BPY's performance, including the performance of assets of BPY that are not assets of BPYU. BPY and its business may be affected by a wide variety of factors, and we can provide no assurance that BPY's future performance will be comparable to its performance in the past.
In addition, distributions on BPY units may not be equivalent to the level currently paid by BPY for various reasons, including, but not limited to, the following:
•BPY may not have enough unrestricted funds to pay such distributions due to changes in BPY’s cash requirements, capital spending plans, cash flow or financial position;
•decisions on whether, when and in which amounts to make any future distributions will be dependent on then-existing conditions, including BPY and BPYU’s financial condition, earnings, legal requirements, including limitations under Bermuda law, restrictions in BPY’s borrowing agreements that limit its ability to pay dividends to unitholders and other factors BPY deems relevant; and
•BPY may desire to retain cash to improve its credit profile or for other reasons.
An active trading market for Class A Stock may not be sustained.
Although shares of our Class A Stock are listed on the Nasdaq, an active trading market for our Class A Stock may not be sustained and we cannot assure you as to the liquidity of markets for Class A Stock or to your ability to sell Class A Stock or the price at which you would be able to sell Class A Stock. Class A Stock could trade at prices that may be lower than market prices for BPY units. A number of factors, principally factors relating to BPY but also including factors specific to BPYU and its business, financial condition and liquidity, economic and financial market conditions, interest rates, unavailability of capital and financing sources, volatility levels and other factors could lead to a decline in the value of Class A Stock and a lack of liquidity in any market for Class A Stock.
General market conditions and unpredictable factors could adversely affect market prices of the BPYU series A preferred stock.
There can be no assurance about the market prices of BPYU series A preferred stock. Several factors, many of which are beyond the control of BPYU and BPY, could influence the market prices of BPYU series A preferred stock, including:
•whether BPYU declares or fails to declare dividends on the BPYU series A preferred stock from time to time;
•real or anticipated changes in the credit ratings assigned to BPYU or BPY securities;
•BPYU’s and BPY’s creditworthiness and credit profile;
•interest rates;
•developments in the securities, credit markets, and developments with respect to financial institutions
generally;
•the market for similar securities; and
•economic, corporate, securities market, geopolitical, regulatory or judicial events that affect BPYU and BPY, the asset
management or real estate industries or the financial markets generally.
Shares of all classes of BPYU's outstanding stock, including the Class A Stock and Series A Preferred Stock, will rank junior to all indebtedness of, and other non-equity claims on, BPYU with respect to assets available to satisfy such claims.
Business Risks
Our revenues and available cash are subject to conditions affecting the retail sector.
Our real property investments are influenced by the retail sector, which may be negatively impacted by increased unemployment, changes in international, national, regional, and local economic conditions, as a result of global events such as international trade disputes, a foreign debt crisis, foreign currency volatility, natural disasters, pandemics, war, civil unrest and terrorism, as well as from domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, rising interest rates and limited growth in consumer income, increased federal income and payroll taxes, increased health care costs, increased state and local taxes, increased real estate taxes, industry slowdowns, lack of availability of consumer credit, increased levels of consumer debt, decreased levels of consumer spending, changes in consumer confidence, fluctuations in seasonal spending in the United States, poor housing market conditions, adverse weather conditions, natural disasters, plant closings, and other factors. Similarly, local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the supply and creditworthiness of current and prospective tenants may negatively impact our properties.
Given these economic conditions, we believe there is a risk that the sales at stores operating in our properties may be adversely affected, which may cause tenants to be unable to pay their rental obligations. Because substantially all of our income is derived from rentals of real property, our income and available cash would be adversely affected if a significant number of tenants are unable to meet their obligations.
Our business has been and is expected to continue to be adversely affected by the COVID-19 pandemic and the preventive measures taken to curb the spread of the virus, as well as the potential for future outbreaks of other highly infectious or contagious diseases.
As a result of the rapid spread of COVID-19, many companies and various governments have imposed restrictions on business activity and travel which may continue and could expand. Business has slowed significantly around the globe, including in our retail business, and there can be no assurance that strategies to address potential disruptions in operations will mitigate the adverse impacts related to the pandemic. Given the ongoing and dynamic nature of the circumstances surrounding COVID-19, it is difficult to predict how significant the impact of this pandemic, including any responses to it, will be on the global economy, our company and our business or for how long disruptions are likely to continue. The extent of such impact will depend on future developments, which are highly uncertain, rapidly evolving and cannot be predicted, including new information which may emerge concerning the severity and transmissibility of this coronavirus and actions taken to contain it including the pace, availability, distribution and acceptance of effective vaccines, among others. Such developments, depending on their nature, duration, and intensity, could have a material adverse effect on our business, financial position, results of operations or cash flows.
We operate in industries or geographies impacted by COVID-19. Many of these are facing financial and operational hardships
due to COVID-19 and responses to it. Adverse impacts on our business may include:
•a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action;
•a slowdown in business activity that may severely impact our tenants' businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to fund their business operations, meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations;
•an increase in re-leasing timelines, potential delays in lease-up of vacant space and the market rates at which such lease will be executed;
•reduced economic activity resulting in a prolonged recession, which could negatively impact consumer discretionary spending and demand; and
•expected completion dates for our development and redevelopment projects may be subject to delay as a result of local economic conditions that may continue to be disrupted as a result of the COVID-19 pandemic.
If these and potential other disruptions caused by COVID-19 continue, our business could continue to be adversely affected.
We may be unable to lease space in our properties on favorable terms or at all.
Our results of operations depend on our ability to continue to lease space in our properties, including vacant space and re-leasing space in properties where leases are expiring, optimizing our tenant mix, or leasing properties on economically favorable terms. Because approximately 7% to 12% of our total leases expire annually based on expiring GLA, we are continually focused on leasing our properties. Similarly, we are pursuing a strategy of replacing expiring short-term leases with long-term leases. There can be no assurance that our leases will be renewed or that vacant space will be re-let at rates equal to or above the current average net effective rental rates or that substantial rent abatements, tenant improvements, early termination rights or below market renewal options will not be offered to attract new tenants or retain existing tenants. If the rental rates decrease, if our existing tenants do not renew their leases or if we do not re-let a significant portion of our available space and space for which leases will expire, our financial condition and results of operations could be adversely affected.
Certain of our properties have had excess space available for prospective tenants, and those properties may continue to experience, and other properties may commence experiencing, such oversupply in the future. Among other causes, there has been an increased number of bankruptcies of national retailers, as well as store closures. There is downward pressure on our rental rates and occupancy levels, and the increased bargaining power of creditworthy retail tenants may result in us having to increase our spend on tenant improvements and potentially make other lease modifications, any of which, in the aggregate, could have an adverse effect on our financial condition and results of operations.
Due to the pandemic, we may experience an increase in re-leasing timelines, potential delays in lease-up of vacant space and the market rates at which such leases will be executed could be impacted. The longer-term impact of the shutdown and resulting economic downturn could reduce demand for retail space.
The bankruptcy or store closures of national tenants, which are tenants with chains of stores in many of our properties, may adversely affect our revenues.
Our leases generally contain provisions designed to ensure the creditworthiness of the tenant. However, companies in the retail industry, including some of our tenants, have declared bankruptcy, or from time to time, have voluntarily ceased their operations, downsized their brick and mortar presence or failed to comply with their contractual obligations to us and to others. We may be unable to re-lease such space or to re-lease it on comparable or more favorable terms. Tenants declaring bankruptcy may also seek protection under the bankruptcy laws from their creditors, including us as lessor. If one of our tenants files for bankruptcy, we may not be able to collect amounts owed by that party prior to filing for bankruptcy. In addition, after filing for bankruptcy, a tenant may terminate any or all of its leases with us, in which event we would have a general unsecured claim against such tenant that would likely be worth less than the full amount owed to us for the remainder of the lease term. As a result, the bankruptcy or closure of a national tenant may adversely affect our revenues. In addition, such closings may allow other tenants to modify their leases to terms that are less favorable for us, also adversely impacting our revenues. For example, certain of our lease agreements include a co-tenancy provision that allows the tenant to pay a reduced rent amount and, in certain instances, terminate the lease, if we fail to maintain certain occupancy levels or if specific anchor tenants are no longer at the property. Therefore, if occupancy or tenancy falls below certain thresholds, rents we are entitled to receive from our retail tenants could be reduced.
The recent COVID-19 related global economic shutdown has increased the risk in the near-term of our tenants’ ability to fulfill lease commitments, which has been materially impacted by retail store closures, quarantines and stay-at-home orders. Many of our tenants could declare bankruptcy or become insolvent and cease business operations as a result of prolonged mitigation efforts.
It may be difficult to sell real estate quickly, and transfer restrictions apply to some of our properties.
Real estate investments are relatively illiquid, which may limit our ability to strategically change our portfolio promptly in response to changes in economic or other conditions. If revenues from a property decline but the related expenses do not, the income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of our mortgaged properties, we may not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us. Moreover, there are some limitations under federal income tax laws applicable to REITs that limit our ability to sell assets.
Real estate may be even more illiquid in the context of an economic downturn that may result from the global economic shutdown. Such illiquidity may limit our ability to vary our portfolio promptly in response to changing economic or investment conditions. Also, financial difficulties of other property owners resulting in distressed sales could depress real estate values in the markets in which we operate.
Our business is dependent on perceptions by retailers and shoppers of the convenience and attractiveness of our retail properties, and our inability to maintain a positive perception may adversely affect our revenues.
We are dependent on perceptions by retailers or shoppers of the safety, convenience and attractiveness of our retail properties. If retailers and shoppers perceive competing retail properties and other retailing options such as the Internet to be more convenient or of a higher quality, our revenues may be adversely affected.
We develop, expand and acquire properties and these activities are subject to risks due to economic factors.
Capital investment to expand or develop properties is anticipated to be an ongoing part of our strategy. In connection with such projects, we will be subject to various risks, which may result in lower than expected returns or a loss. These risks include the following:
•we may not have sufficient capital to proceed with planned expansion or development activities;
•acquisition or construction costs of a project may exceed original estimates;
•we may not be able to obtain zoning, occupancy or other required governmental permits and authorizations;
•income from completed projects may not meet projections; and
•we may not be able to obtain anchor store, mortgage lender and property partner approvals, if applicable, for expansion or development activities.
Newly acquired properties may not perform as expected, such as not realizing expected occupancy and rental rates. In addition, we may have unexpected costs and may be unable to finance or refinance the new properties at acceptable terms. If an acquisition is not successful, we may have a loss on our investment in the property. Furthermore, if we elect to pursue "mixed use" development, we expose ourselves to risks associated with each non-retail use (e.g., office, residential, hotel and entertainment).
The impact of the pandemic and associated restrictions that have been put in place by local governments may cause delays in construction and may impact our ability to progress pre-leasing efforts.
We are in a competitive business.
There are numerous retail formats that compete with our properties in attracting retailers to lease space. In addition, retailers at our properties face continued competition from retailers at other malls, lifestyle and power centers, outlet malls and other discount shopping centers, discount shopping clubs, Internet sales, catalog companies, and telemarketing. Competition of these types could adversely affect our revenues and cash flows.
We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include REITs, public and private financial institutions, and private institutional investors.
Our ability to realize our strategies and capitalize on our competitive strengths are dependent on our ability to effectively operate a large portfolio of high quality properties, maintain good relationships with our tenants and consumers, and remain well-capitalized. Our failure to do any of the foregoing could affect our ability to compete effectively in the markets in which we operate.
Some of our properties are subject to potential natural or other disasters.
A number of our properties are located in areas that are subject to natural or other disasters, including hurricanes, flooding and earthquakes. Furthermore, many of our properties are located in coastal regions, and would therefore be affected by any future increases in sea levels. For example, certain of our properties are located in California and Hawaii or in other areas with a higher risk of natural disasters such as earthquakes or tsunamis. Natural disasters can also delay redevelopment or development projects, increase investment costs to repair or replace damaged properties, increase future property insurance costs and negatively impact the tenant demand for lease space.
Possible terrorist activity or other acts or threats of violence and threats to public safety could adversely affect our financial condition and results of operations.
Terrorist attacks and threats of terrorist attacks in the United States or other acts or threats of violence may result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand could make it difficult for us to renew or re-lease our properties.
Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be reduced or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by such attacks and threats of attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts and threats might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.
Information technology failures and data security breaches could harm our business.
We use information technology, digital telecommunications and other computer resources to carry out important operational activities and to maintain our business records. Many of these resources are provided to us and/or maintained on our behalf by third-party service providers pursuant to agreements that specify to varying degrees certain security and service level standards. Although we and our service providers employ what we believe are adequate security, disaster recovery and other preventative and corrective measures, our ability to conduct our business may be impaired if these resources are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, intentional penetration or disruption of our information technology resources by a third party, natural disaster, hardware or software corruption or failure or error or poor product or vendor/developer selection (including a failure of security controls incorporated into or applied to such hardware or software), telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions (including the failure to follow our security protocols), or lost connectivity to our networked resources.
A significant and extended disruption in the functioning of these resources, including our primary website, could damage our reputation and cause us to lose customers, tenants and revenues, result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines, result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT, result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information, require significant management attention and resources to remedy any resulting damages, subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements, and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues, which expenses we may not be able to recover in whole or in any part from our service providers or responsible parties, or their or our insurers. Moreover, cyber attacks perpetrated against our tenants, including unauthorized access to customers’ credit card data and other confidential information, could diminish consumer confidence and consumer spending and negatively impact our tenants' businesses and our business.
We may incur costs to comply with environmental laws.
Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to third parties for bodily injury or property damage (investigation and/or clean-up costs) incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner's ability to sell, lease or borrow with respect to the real estate. Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal, state and local laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.
Our properties have been subjected to varying degrees of environmental assessment at various times. It is possible that these assessments do not reveal all potential environmental liabilities or that conditions have changed since the assessment was prepared (typically, at the time the property was purchased or developed). However, the identification of new areas of
contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.
Some potential losses are not insured.
We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss and environmental insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, and certain environmental conditions not discovered within the applicable policy period, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.
BPYU is subject to litigation related to the BPY Transaction.
BPYU is subject to litigation related to the BPY Transaction. BPYU cannot predict the outcome of pending litigation, nor can it predict the amount of time and expense that will be required to resolve such litigation. The costs of defending the litigation, even if resolved in BPYU’s favor, could be substantial and such litigation could distract BPYU from pursuing potentially beneficial business opportunities.
Inflation or deflation may adversely affect our financial condition and results of operations.
Should the general price level increase in the future, this may have an impact on our consumers' disposable income. This may place pressure on retailer sales and margins as their costs rise and they may be unable to pass the costs along to the consumer, which in turn may affect their ability to pay rents and which could adversely impact our cash flow. Many but not all of our leases have fixed amounts for recoveries and if our costs rise, we may not be able to pass these costs on to our tenants. Rising costs may also impact our ability to generate cash flows.
Inflation also poses a risk to us due to the possibility of future increases in interest rates. Such increases would result in higher interest rates on new fixed-rate debt and adversely impact us due to our outstanding variable rate debt which could adversely affect our cash flows and our ability to pay principal and interest on our debt and our ability to make distributions to our stockholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures or significantly increase our future interest expense. From time to time, we manage our exposure to interest rate fluctuations related to a portion of our variable-rate debt using interest rate cap, swap and treasury lock agreements. Such agreements allow us to replace variable-rate debt with fixed-rate debt. However, our efforts to manage risks associated with interest rate volatility may not be successful. Additionally, interest rate cap, swap and treasury-lock agreements expose us to additional risks, including that the counterparties to the agreements might not perform their obligations. We also might be subject to additional costs, such as transaction fees or breakage costs, if we terminate these agreements.
Deflation may have an impact on our ability to repay our debt. Deflation may put pressure on our tenants' profit margins or delay consumption and thus weaken tenant sales, which may reduce our tenants' ability to pay rents. Deflationary pressure on retailers may diminish their ability to rent our space and decrease our ability to re-lease the space on favorable terms to us.
We may be adversely affected by the potential discontinuation of LIBOR.
The Financial Conduct Authority in the U.K. has announced that it will cease to compel banks to participate in LIBOR
after 2021. LIBOR is widely used as a benchmark rate around the world for derivative financial instruments, bonds and other
floating-rate instruments. This change to the administration of LIBOR, and any other reforms to benchmark interest rates, could
create significant risks and challenges for us and our operating businesses. The gradual elimination of LIBOR rates may have
an impact on over-the-counter derivative transactions, including potential contract repricing. The discontinuance of, or changes to, benchmark interest rates may require adjustments to agreements to which we and other market participants are parties, as well as to related systems and processes. This may result in market uncertainty until a new benchmark rate is established and potentially increased costs under such agreements.
Our real estate assets may be subject to impairment charges.
We regularly review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant
decreases in occupancy percentage, debt maturities, changes in management's intent with respect to the properties and prevailing market conditions. In our estimate of cash flows, we consider factors such as trends and prospects and the effects of demand and competition on expected future operating income. If we are evaluating the potential sale of an asset or redevelopment alternatives, the undiscounted future cash flows consider the most likely course of action as of the balance sheet date based on current plans, intended holding periods and available market information. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. This includes estimates of our expected holding period of our properties, including estimates of the probability of obtaining concessions from creditors at properties for which the Company has suspended funding equity contributions to make contractual interest and/or principal payments. Impairment charges have an immediate direct impact on our earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our operating results in the period in which the charge is taken.
Organizational Risks
We are controlled by BPY and its interests may conflict with our interests or the interests of holders of Class A Stock.
As of February 24, 2021, BPY and its affiliates control approximately 96.4% of the voting power of the Company’s outstanding voting shares, and the Company is party to a Master Services Agreement with Brookfield Asset Management and its affiliates. In the ordinary course of their business activities, BPY and Brookfield Asset Management may engage in activities where their interests conflict with our interests or those of holders of Class A Stock. BPY and Brookfield Asset Management may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, BPY and Brookfield Asset Management may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment in us, even though such transactions might involve risks to the holders of our Class A Stock.
We are a "controlled company" within the meaning of the rules of the Nasdaq Stock Market ("Nasdaq") and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. Holders of our Class A Stock do not have the same protections afforded to stockholders of companies that are subject to such requirements.
As of February 24, 2021, BPY and its affiliates control approximately 96.4% of the Company’s shares entitled to vote generally in the election of directors. As a result, we are a "controlled company" within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirements that:
•we have a board that is comprised of a majority of "independent directors," as defined under the rules of such exchange;
•we have a nominating and corporate governance committee that is comprised entirely of independent directors; and
•we have a compensation committee that is comprised entirely of independent directors.
Although we are not required to under the controlled company exceptions, we have a majority of independent directors on our board and we have a fully independent governance and nominating committee. As we are externally managed under the Master Services Agreement and do not employ any of the persons responsible for managing our business, we do not have a compensation committee. Accordingly, holders of our Class A Stock do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
Our fourth amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain disputes between BPYU’s stockholders and BPYU and its current or former directors, officers and other stockholders, which could limit BPYU’s stockholders’ ability to obtain a favorable judicial forum for disputes with BPYU or its current or former directors, officers or other stockholders.
Pursuant to our fourth amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of BPYU, (ii) any action asserting a claim of breach of fiduciary duty owed by any current or former director, officer or stockholder of BPYU to BPYU or its stockholders, (iii) any action asserting a claim against BPYU arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation and bylaws, each as currently in effect, or (iv) any action asserting a claim against BPYU governed by the internal affairs
doctrine. The choice of forum provision will not apply to any causes of action arising under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The choice of forum provision may limit a BPYU stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with BPYU or its current or former directors, officers or other stockholders, which may discourage such lawsuits against BPYU and its current or former directors, officers and other stockholders. Alternatively, if a court were to find the choice of forum provision contained in our fourth amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, BPYU may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, results of operations, and financial condition.
We are a holding company with no operations of our own and depend on our subsidiaries for cash.
Our operations are conducted almost entirely through our subsidiaries. Our ability to make dividends or distributions in connection with being a REIT is highly dependent on the earnings of and the receipt of funds from our subsidiaries through dividends or distributions, and our ability to generate cash to meet our debt service obligations is further limited by our subsidiaries' ability to make such dividends, distributions or intercompany loans. Our subsidiaries' ability to pay any dividends or distributions to us are limited by their obligations to satisfy their own obligations to their creditors and preferred stockholders before making any dividends or distributions to us. Delaware law imposes requirements that could further restrict our ability to pay dividends to holders of our Class A Stock.
We share control of some of our properties with other investors and may have conflicts of interest with those investors.
For the Unconsolidated Properties (as defined in Note 1) and consolidated joint ventures, we are required to make decisions with the other investors who have interests in the respective property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties, to make distributions, as well as to bankruptcy decisions related to the Unconsolidated Properties and related joint ventures. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducements to the other investors to obtain a favorable resolution.
In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. As such, we might be required to make decisions about buying or selling interests in a property or properties at a time that is not desirable.
Bankruptcy of our joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties.
The bankruptcy of one of the other investors in any of our jointly owned properties could materially and adversely affect the respective property or properties. Pursuant to the Bankruptcy Code, we would be precluded from taking some actions affecting the estate of the other investor without prior court approval which would, in most cases, entail prior notice to other parties and a hearing. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than would otherwise be required.
We are impacted by tax-related obligations to some of our partners.
We own certain properties through partnerships that have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.
Several of our joint venture partners have a tax status that may influence our decisions relating to the financing of, selling and revenue generation from their properties.
We provide financial support for a number of joint venture partners.
We provide secured financing to some of our joint venture partners. A default by a joint venture partner under their debt obligation may result in a loss.
We and/or a subsidiary that has elected to be treated as a REIT may not be able to maintain status as a REIT.
We have elected to be treated as a REIT commencing with our taxable year beginning July 1, 2010 (our date of incorporation), and certain of our subsidiaries have also made elections to be treated as REITs. Qualification and taxation as a REIT depends upon the REIT’s ability to satisfy several requirements (some of which are outside our control), including tests related to annual operating results, the nature and diversification of our assets, sources of income, distribution levels and diversity of stock ownership. Due to certain investments made by us and our affiliates and joint venture partners, we and our REIT subsidiaries may reflect a significant amount of related party rent as non-qualifying income each year and such non-qualifying income may affect the ability of us and such REIT subsidiaries to meet the REIT income requirements. In addition, certain distributions made by certain of our REIT subsidiaries may be considered preferential dividends and, accordingly, may affect the ability of those subsidiaries to satisfy the REIT distribution requirement and qualify as a REIT. If any of our REIT subsidiaries fail to qualify as a REIT, such failure could result in loss of our REIT status. The various REIT qualification tests required by the Internal Revenue Code of 1986, as amended (the "Code") are highly technical and complex. Accordingly, there can be no assurance that we or one or more of our REIT subsidiaries has operated in accordance with these requirements or will continue to operate in a manner so as to qualify or remain qualified as a REIT.
If we and/or one of our REIT subsidiaries fail to comply with the REIT qualification tests with respect to any taxable year, we or such REIT subsidiary may be subject to monetary penalties or possibly disqualification as a REIT. If we and/or a REIT subsidiary fail to maintain our qualification as a REIT, we and/or our REIT subsidiary would not be allowed to deduct distributions to stockholders in computing taxable income and federal income tax. If REIT status is lost, corporate level income tax would apply to our and/or our REIT subsidiary’s taxable income at the regular corporate rate, and such taxes could be substantial. As a result, the amount available for distribution to holders of equity securities that would otherwise receive dividends could be reduced for the year or years involved, and we and/or such REIT subsidiary would no longer be required to make distributions to preserve our tax status. In addition, unless we and/or such REIT subsidiary were entitled to relief under the relevant statutory provisions, we and/or such REIT subsidiary would be disqualified from treatment as a REIT for four subsequent taxable years.
In order for us and our REIT subsidiaries to qualify for treatment as a REIT, assuming that certain other requirements are met, the Code generally requires that such entity distribute at least 90% of its taxable ordinary income to stockholders. To the extent that we or our REIT subsidiaries distribute less than 100% of our REIT taxable income (including both taxable ordinary income and taxable capital gains), we or any such REIT subsidiary will be subject to U.S. federal corporate income tax on the undistributed taxable income and could be subject to an additional 4% nondeductible excise tax if the actual amount that is distributed to equity holders in a calendar year is less than "the required minimum distribution amount" specified under U.S. federal income tax laws. We expect to distribute 100% of our taxable capital gains and taxable ordinary income to stockholders annually. It is possible, from time to time, that we may not have sufficient cash from operations to meet the distribution requirements. In the event such short fall occurs, we may pay dividends in the form of taxable stock dividends. In the case of a taxable stock dividend, stockholders would be required to include the dividend as income and would be required to satisfy the tax liability associated with the distribution with cash from other sources.
Legislative or regulatory action could adversely affect stockholders and our Company.
In recent years, numerous legislative, judicial and administrative changes have been made to the federal income tax laws applicable to investments in REITs and similar entities. Additional changes to tax laws are likely to continue to occur in the future, and we cannot assure our stockholders that any such changes will not adversely affect the taxation of a stockholder. We cannot assure you that future changes to tax laws and regulations will not have an adverse effect on an investment in our stock.
Liquidity Risks
Our indebtedness could adversely affect our financial health and operating flexibility.
As of December 31, 2020, we had $23.2 billion aggregate principal amount of indebtedness outstanding at our proportionate share including $6.9 billion of our share of unconsolidated debt and our junior subordinated notes of $206.2 million. Our indebtedness may have important consequences to us and the value of our equity, including:
•limiting our ability to borrow significant additional amounts for working capital, capital expenditures, debt service requirements, execution of our business strategy or other purposes;
•limiting our ability to use operating cash flow in other areas of our business or to pay dividends because we must dedicate a portion of these funds to service debt;
•increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given the portion of our indebtedness which bears interest at variable rates;
•limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation; and
•giving secured lenders the ability to foreclose on our assets.
We are also subject to the risks normally associated with debt financing, including the risk that our cash flows from operations will be insufficient to meet required debt service, that we will be able to refinance or extend such indebtedness on acceptable terms, or at all, or that rising interest rates could adversely affect our debt service costs. In addition, our interest rate hedging arrangements may expose us to additional risks, including a risk that the counterparty to the hedging arrangement may fail to honor its obligations and termination of such arrangements typically involve certain transaction fees or breakage costs. There can be no assurance that our hedging activities will have the desired impact on our results of operations, liquidity or financial condition.
Our debt contains restrictions and covenants which may limit our ability to enter into or obtain funding for certain transactions or operate our business.
The terms of certain of our debt will require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests, including ratios and tests based on leverage, interest and fixed charge coverage and net worth, or to satisfy similar tests as a precondition to incurring additional debt. We entered into a revolving credit facility in April 2012 that subjects us to such covenants and restrictions. The revolving credit facility was amended in July 2020, and we may draw up to $1.5 billion under it, including the uncommitted accordion feature. In addition, certain of our indebtedness contains restrictions. The covenants and other restrictions under our debt agreements affect, among other things, our ability to:
•amend our organizational documents;
•incur indebtedness;
•create liens on assets;
•sell assets;
•manage our cash flows;
•transfer assets to other subsidiaries;
•make capital expenditures;
•engage in mergers and acquisitions; and
•make distributions to equity holders, including holders of our Class A Stock.
In addition, our debt contains certain terms which include restrictive operational and financial covenants and restrictions on the distribution of cash flows from properties serving as collateral for the debt. Fees and cash flow restrictions may affect our ability to fund our on-going operations from our operating cash flows and we may be limited in our operating and financial flexibility and, thus, may be limited in our ability to respond to changes in our business or competitive activities.
The COVID-19 related global economic shutdown may also negatively impact our ability to meet our financial covenants in the near-term.
We may not be able to refinance, extend or repay our consolidated debt or our portion of indebtedness of our Unconsolidated Real Estate Affiliates.
As of December 31, 2020, our proportionate share of total debt, including the $206.2 million of junior subordinated notes, aggregated $23.2 billion consisting of our consolidated debt, net of noncontrolling interest, of $16.3 billion combined with our share of the debt of our Unconsolidated Real Estate Affiliates (Note 5) of $6.9 billion. Of our proportionate share of total debt, $6.9 billion is recourse to the Company due to guarantees or other security provisions for the benefit of the note holder. There can be no assurance that we, or the joint venture, will be able to refinance or restructure this debt on acceptable terms or otherwise, or that operations of the properties or contributions by us and/or our partners will be sufficient to repay such loans. If we or the joint venture cannot service this debt, we or the joint venture may have to deed property back to the applicable lenders.
This risk may be increased as a result of disrupted market conditions resulting from the shutdown. Our strategy to stagger the maturities of our mortgage portfolio attempts to mitigate our exposure to excessive amounts of debt maturing in any one year and to maintain relationships with a large number of lenders to limit exposure to any one counterparty.
We may not be able to raise capital through financing activities.
Substantially all of our assets are encumbered by property-level indebtedness; therefore, we may be limited in our ability to raise additional capital through property level or other financings. In addition, our ability to raise additional capital could be limited to refinancing existing secured mortgages before their maturity date which may result in yield maintenance or other prepayment penalties to the extent that the mortgage is not open for prepayment at par.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
BPYU's investments in real estate as of December 31, 2020 consisted of its interests in 121 retail properties. We generally own the land underlying the properties; however, at certain of our properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. We manage substantially all of our Consolidated Properties (defined in Note 1) and provide management, leasing, and other services to a majority of our Unconsolidated Properties. Information regarding encumbrances on our properties is included here and on Schedule III of this Annual Report.
Mall and freestanding GLA includes in-line mall shop and outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a mall) and excludes anchors and tenant-owned GLA.
The following sets forth certain information regarding our properties as of December 31, 2020 (GLA in thousands):
RETAIL PROPERTIES
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
Consolidated Retail Properties
1 200 Lafayette 90% New York, NY 30 - - - - 30 100% 27 Leased
2 218 W 57th Street 90% New York, NY 35 - - - - 35 - 32
3 605 North Michigan Avenue 90% Chicago, IL 73 - - - - 73 79.3% 66 Sephora, Chase Bank, Regus
4 530 Fifth Avenue 81% New York, NY 59 - - - - 59 100% 48 Vans, Chase Bank, Duane Reade
5 685 Fifth Avenue 88% New York, NY 24 - - - - 24 100% 21 Coach, Stuart Weitzman, Tag Heuer
6 730 Fifth Avenue 90% New York, NY 22 - - - - 22 100% 20 Bulgari, Mikimoto, Zegna
7 830 N. Michigan Ave. 90% Chicago, IL 68 50 - - - 117 94.3% 106 Uniqlo, Columbia
8 Beachwood Place 90% Beachwood, OH 325 317 247 97 - 986 79.5% 667 Nordstrom, Saks Fifth Avenue, Dillard's
9 Bellis Fair 90% Bellingham, WA 427 100 238 - - 765 83.2% 476 Macy's, JCPenney, Kohl's, Dick's Sporting Goods, Target
10 Brass Mill Center 90% Waterbury, CT 444 218 319 189 - 1,171 86.4% 769 JCPenney, Burlington Stores, Regal Cinemas
11 Coastland Center (1) 90% Naples, FL 339 276 315 - - 930 89.7% 555 Dillard's, Macy's, JCPenney
12 Columbia Mall 90% Columbia, MO 296 - 421 - - 717 87.9% 267 Dillard's, JCPenney, Target
13 Coral Ridge Mall 90% Coralville, IA 539 - 442 - 25 1,007 94.8% 509 Dillard's, Scheels, JCPenney, Target, Homegoods, Best Buy, Ulta
14 Crossroads Center 90% St. Cloud, MN 423 168 229 - - 819 82.9% 533 Macy's, Scheels, JCPenney, Target
15 Deerbrook Mall 90% Humble, TX 634 - 654 - - 1,287 96.1% 572 Dillard's, Macy's, JCPenney, AMC Theaters, Dick's Sporting Goods
16 Eastridge Mall 90% Casper, WY 281 214 76 - - 571 82.7% 447 JCPenney, Dick's Sporting Goods, Target
17 Four Seasons Town Centre 90% Greensboro, NC 490 294 202 - - 986 90.8% 707 Dillard's, JCPenney, Round 1 Bowling
18 Fox River Mall 90% Appleton, WI 611 - 595 - - 1,206 95% 551 Macy's, Scheels, JCPenney, Target
19 Grand Teton Mall 90% Idaho Falls, ID 210 199 125 93 - 628 88% 454 Dillard's, JCPenney, Ross Dress For Less
20 Greenwood Mall 90% Bowling Green, KY 423 278 151 - - 852 89% 633 Dillard's, Belk, JCPenney
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
21 Hulen Mall 90% Ft. Worth, TX 394 - 597 - - 990 94% 355 Dillard's, Macy's
22 Jordan Creek Town Center 90% West Des Moines, IA 732 152 198 252 - 1,334 95.8% 1,025 Von Maur, Dillard's, Scheels, Century Theaters
23 Mall Of Louisiana 90% Baton Rouge, LA 602 - 806 144 - 1,551 95.4% 673 Dillard's, Macy's, JCPenney, Nordstrom Rack, AMC Theaters, Dick's Sporting Goods, Main Event
24 Mall St. Matthews 90% Louisville, KY 499 - 514 - - 1,013 88.6% 450 Dillard's, Cinemark, JCPenney, Dave & Buster's
25 Mayfair 90% Wauwatosa, WI 632 289 360 - 188 1,469 97.8% 1,000 Nordstrom, Macy's, AMC Theaters, Crate & Barrel
26 Meadows Mall 90% Las Vegas, NV 309 - 637 - - 945 84.9% 279 Dillard's, Macy's, JCPenney, Round 1 Bowling
27 Mondawmin Mall 90% Baltimore, MD 384 - - - 74 458 98.4% 413 Ross Dress for Less, Shoppers Food & Pharmacy
28 Neshaminy Mall 90% Bensalem, PA 382 416 218 - - 1,016 73.3% 720 Barnes & Noble, Boscov's, AMC Theaters, Round 1 Bowling
29 North Point Mall (4) 90% Alpharetta, GA 400 540 363 - 25 1,328 88.1% 871 Von Maur, Dillard's, Macy's, JCPenney
30 North Star Mall 90% San Antonio, TX 516 207 522 - - 1,245 95.6% 652 Dillard's, Macy's, Saks Fifth Avenue, JCPenney
31 Northtown Mall 90% Spokane, WA 431 242 242 - - 915 89.4% 607 Kohl's, JCPenney, Regal Cinemas
32 Oakwood Center 90% Gretna, LA 355 229 332 - - 916 88.9% 528 Dillard's, JCPenney, Dick's Sporting Goods
33 Oakwood Mall 90% Eau Claire, WI 462 146 198 - - 806 91.1% 549 JCPenney, Scheels, Hobby Lobby
34 Oxmoor Center (1) 85% Louisville, KY 313 296 271 - - 880 91.6% 519 Von Maur, Macy's, Dick's Sporting Goods, Top Golf
35 Paramus Park 90% Paramus, NJ 374 - 289 - 21 684 81.6% 357 Macy's, Stew Leonard's
36 Park City Center 90% Lancaster, PA 523 515 227 - 7 1,271 89.3% 943 Boscov's, Kohl's, JCPenney
37 Park Meadows 90% Lone Tree, CO 732 - 823 - - 1,555 98% 661 Nordstrom, Dillard's, Macy's, JCPenney, Dick's Sporting Goods
38 Peachtree Mall 90% Columbus, GA 385 222 201 - 13 821 92.3% 559 Dillard's, Macy's, At Home, JCPenney
39 Pecanland Mall 90% Monroe, LA 410 20 532 - - 962 82.3% 388 Dillard's, Belk, JCPenney, Dick's Sporting Goods
40 Perimeter Mall 90% Atlanta, GA 506 222 831 - - 1,559 95.8% 657 Nordstrom, Von Maur, Dillard's, Macy's
41 Pioneer Place (1) 90% Portland, OR 318 - - - - 318 92.1% 287 Apple, Tiffany's, Louis Vuitton, H&M, Zara, WeWork
42 Prince Kuhio Plaza (1) 90% Hilo, HI 308 125 62 - - 494 90.6% 390 Macy's, TJ Maxx, Tractor Supply, CVS
43 Providence Place (1) 85% Providence, RI 652 279 200 - - 1,131 96.6% 793 Macy's, Boscov's, Providence Place Cinemas, Dave & Buster's
44 Quail Springs Mall 90% Oklahoma City, OK 389 160 537 - - 1,086 88.8% 495 Von Maur, Dillard's, JCPenney, AMC Theaters, Lifetime Fitness, Round 1 Bowling
45 River Hills Mall 90% Mankato, MN 368 180 174 - - 722 87% 494 Scheels, JCPenney, Target
46 Rivertown Crossings 90% Grandville, MI 637 150 486 - - 1,273 88.5% 710 Macy's, Kohl's, JCPenney, Dick's Sporting Goods, Round 1 Bowling
47 Shops at Merrick Park (1) 90% Coral Gables, FL 414 - 330 - 101 845 93% 465 Neiman Marcus, Nordstrom, Equinox
48 Sooner Mall 90% Norman, OK 243 135 137 - - 515 91.1% 341 Dillard's, JCPenney
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
49 Southwest Plaza 90% Littleton, CO 684 35 542 - 62 1,323 93.9% 705 Dillard's, JCPenney, Target, Dick's Sporting Goods
50 Spokane Valley Mall 90% Spokane, WA 326 126 251 138 - 841 87.7% 532 Macy's, JCPenney, Nordstrom Rack, Dick's Sporting Goods, Regal Cinemas
51 Staten Island Mall 90% Staten Island, NY 854 50 467 83 - 1,454 92.4% 891 Primark, Macy's, JCPenney, AMC Theaters, Dave & Buster's
52 Stonestown Galleria 90% San Francisco, CA 406 161 - - - 567 92.1% 512 Regal Cinemas, Whole Foods, Trader Joe's, Target, The Sports Basement
53 The Shoppes At Buckland Hills 90% Manchester, CT 554 - 513 - - 1,067 92% 500 Macy's, JCPenney, Dick's Sporting Goods
54 The Streets At Southpoint 85% Durham, NC 598 - 726 - - 1,325 95.7% 510 Nordstrom, Macy's, Belk, JCPenney, Barnes & Noble
55 The Woodlands Mall 90% Woodlands, TX 714 - 713 - 42 1,469 95.6% 682 Nordstrom, Macy's, Dillard's, JCPenney, Dick's Sporting Goods
56 Town East Mall 90% Mesquite, TX 454 - 809 - - 1,264 94.5% 410 Dillard's, Macy's, JCPenney, Dick's Sporting Goods
57 Towson Town Center 90% Towson, MD 615 - 419 - - 1,034 88.7% 555 Nordstrom, Macy's, Round 1 Bowling, Crate & Barrel
58 Tysons Galleria 90% McLean, VA 294 260 252 - - 806 92.3% 500 Neiman Marcus, Saks Fifth Avenue, Bowlero
59 Valley Plaza Mall 90% Bakersfield, CA 533 270 292 - - 1,095 96.5% 725 Macy's, JCPenney, Target
60 Visalia Mall 90% Visalia, CA 182 257 - - - 439 93.8% 396 Macy's, JCPenney
61 Water Tower Place 85% Chicago, IL 411 297 - - 86 794 90.8% 673 American Girl
62 Westlake Center 90% Seattle, WA 126 - - - - 126 95.1% 114 Saks Off Fifth, Nordstrom Rack, Zara
63 Willowbrook (1) 90% Wayne, NJ 565 128 738 - - 1,432 96.8% 626 Bloomingdale's, Macy's, Lord & Taylor, Cinemark, Dave & Buster's
Total Consolidated Retail Properties 25,737 8,222 19,825 996 645 55,425 91.4% 31,971
Unconsolidated Retail Properties
64 Ala Moana Center (1) 45% Honolulu, HI 1,299 972 - 14 363 2,648 93.3% 1,195 Nordstrom, Bloomingdale's, Neiman Marcus, Macy's, Foodland Farms, Target
65 Alderwood 45% Lynnwood, WA 580 178 528 39 - 1,325 98.4% 360 Nordstrom, Macy's, JCPenney, Loews Cineplex
66 Altamonte Mall 45% Altamonte Springs, FL 482 331 312 - - 1,125 90.1% 367 Dillard's, Macy's, JCPenney, AMC Theaters
67 Apache Mall (1) 46% Rochester, MN 413 206 163 - - 782 95.2% 285 Macy's, Scheels, JCPenney
68 Augusta Mall (1) 46% Augusta, GA 478 - 597 - - 1,075 94.6% 220 Dillard's, Macy's, JCPenney, Dick's Sporting Goods
69 Baybrook Mall 46% Friendswood, TX 1,074 97 721 - - 1,891 98.9% 539 Dillard's, Macy's, JCPenney, Lifetime Fitness, Star Cinema Grill, Dick's Sporting Goods, Dave & Buster's
70 Boise Towne Square (1) 46% Boise, ID 409 426 248 115 - 1,197 89.4% 437 Dillard's, Macy's, Kohl's, JCPenney, Nordstrom Rack
71 Carolina Place 45% Pineville, NC 533 277 349 - - 1,160 92.6% 366 Dillard's, Belk, JCPenney, Dave & Buster's, Dick's Sporting Goods
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
72 Christiana Mall 23% Newark, DE 610 - 641 - - 1,251 97.9% 138 Nordstrom, Macy's, JCPenney, Cinemark, Cabela's, Target
73 Clackamas Town Center 45% Happy Valley, OR 627 - 775 - - 1,402 94.6% 283 Macy's, JCPenney, Century Theatres, Dave & Buster's
74 Columbiana Centre 46% Columbia, SC 294 145 361 - - 800 96.2% 202 Dillard's, Belk, JCPenney, Dave & Buster's
75 Coronado Center (1) 46% Albuquerque, NM 663 118 281 - - 1,062 97.2% 359 Macy's, Kohl's, JCPenney, Dick's Sporting Goods, Round 1 Bowling, Furniture City
76 Cumberland Mall 46% Atlanta, GA 624 155 278 - - 1,058 96.9% 359 Macy's, Costco, Dick's Sporting Goods, Round 1 Bowling
77 Fashion Place (1) 46% Murray, UT 466 162 338 - - 965 99% 289 Nordstrom, Dillard's, Macy's, Crate & Barrel
78 Fashion Show 45% Las Vegas, NV 846 272 762 - - 1,879 93.1% 504 Neiman Marcus, Nordstrom, Saks Fifth Avenue, Dillard's, Macy's, Macy's Men, Dick's Sporting Goods
79 First Colony Mall 45% Sugar Land, TX 541 - 619 - - 1,160 98.5% 244 Dillard's, Macy's, JCPenney, Dick's Sporting Goods, AMC Theaters
80 Florence Mall (4) 45% Florence, KY 380 - 552 - - 933 76.3% 172 Macy's, Macy's Home Store, JCPenney
81 Galleria At Tyler 45% Riverside, CA 562 - 622 - - 1,184 94.2% 254 Macy's, JCPenney, AMC Theaters
82 Glenbrook Square 46% Fort Wayne, IN 422 556 - - - 978 88.3% 450 Macy's, JCPenney, Round 1 Bowling
83 Glendale Galleria (1) 45% Glendale, CA 511 305 525 - 139 1,479 93.6% 431 Bloomingdale's, Macy's, JCPenney, Target, Dick's Sporting Goods, Gold's Gym
84 Governor's Square (1) 46% Tallahassee, FL 338 - 692 - - 1,030 82.3% 156 Dillard's, JCPenney
85 Kenwood Towne Centre 45% Cincinnati, OH 516 241 401 - - 1,158 93.5% 342 Nordstrom, Dillard's, Macy's, Louis Vuitton, Tiffany
86 Lynnhaven Mall 46% Virginia Beach, VA 650 150 381 - - 1,182 97.1% 368 Dillard's, Macy's, JCPenney, Dick's Sporting Goods, AMC Theaters, Dave & Buster's
87 Market Place Shopping Center 46% Champaign, IL 412 81 307 - - 800 94.6% 227 Macy's, Kohl's, JCPenney, Dick's Sporting Goods
88 Miami Design District 20% Miami, FL 664 - - - 87 750 86.4% 151 Hermes, Fendi, Louis Vuitton, Valentino, Bulgari, Prada, Gucci
89 Mizner Park (1) 23% Boca Raton, FL 147 80 - - 264 491 96.1% 113 Lord & Taylor, IPIC Theaters
90 Natick Mall (1) 45% Natick, MA 934 88 558 - - 1,581 92% 461 Neiman Marcus, Nordstrom, Macy's, Lord & Taylor, Wegman's, Dave & Buster's
91 Northbrook Court 45% Northbrook, IL 450 406 130 - - 986 87.7% 386 Neiman Marcus, Lord & Taylor, AMC Theaters, Crate & Barrel, Fresh Farm
92 Northridge Fashion Center 46% Northridge, CA 651 257 557 - - 1,464 94.5% 418 Macy's, JCPenney, Dick's Sporting Goods, Pacific Theaters, Dave & Buster's, Gold's Gym
93 Oakbrook Center 43% Oak Brook, IL 1,381 284 468 - 260 2,393 97.3% 829 Neiman Marcus, Nordstrom, Macy's, AMC Theatres, Lifetime Fitness, KidZania
94 Oglethorpe Mall 46% Savannah, GA 399 221 316 - - 936 89.1% 286 Macy's, Belk, JCPenney
95 One Union Square 45% San Francisco, CA 23 - - - 20 42 97.6% 19 Bulgari, Moncler
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
96 Otay Ranch Town Center 45% Chula Vista, CA 535 - 140 - - 675 91.9% 242 Macy's, AMC Theaters, Barons Market
97 Park Place 46% Tucson, AZ 455 - 584 - - 1,039 90.7% 209 Dillard's, Century Theatres, Round 1 Bowling
98 Pembroke Lakes Mall 46% Pembroke Pines, FL 379 353 386 - - 1,119 94.9% 337 Dillard's, Macy's, JCPenney, AMC Theaters, Round 1 Bowling
99 Pinnacle Hills Promenade 45% Rogers, AR 367 99 162 306 74 1,008 85.3% 382 Dillard's, JCPenney, Malco Theatres, Dave & Buster's
100 Plaza Frontenac 50% St. Louis, MO 219 126 135 - - 479 94.1% 171 Neiman Marcus, Saks Fifth Avenue
101 Ridgedale Center 46% Minnetonka, MN 364 177 596 - - 1,137 89.2% 249 Nordstrom, Macy's, JCPenney
102 Riverchase Galleria 46% Hoover, AL 514 330 610 - - 1,454 88.2% 388 Von Maur, Macy's, Belk, Belk Homestore, JCPenney, Dave & Buster's
103 Saint Louis Galleria 66% St. Louis, MO 460 - 714 - - 1,174 96.7% 306 Nordstrom, Dillard's, Macy's
104 Stonebriar Centre 45% Frisco, TX 925 163 703 - - 1,791 97.7% 491 Nordstrom, Dillard's, Macy's, JCPenney, Dick's Sporting Goods, AMC Theaters, KidZania
105 The Crossroads 46% Portage, MI 259 82 421 - - 762 84% 157 Macy's, Burlington Stores, JCPenney
106 The Gallery At Harborplace 46% Baltimore, MD 91 - - - 292 383 63% 176 Victoria Secret, Footlocker, Forever 21, Spaces
107 The Grand Canal Shoppes 45% Las Vegas, NV 642 - - - 43 685 96.8% 310 Louis Vuitton, Tao Nightclub, Smith & Wollensky, Canaletto
108 The Maine Mall 46% South Portland, ME 570 - 378 - 1 948 97.7% 262 Macy's, JCPenney, Round 1 Bowling, Best Buy, Jordan's Furniture
109 The Mall In Columbia 45% Columbia, MD 705 213 449 - - 1,367 91.3% 414 Nordstrom, Macy's, Lord & Taylor, JCPenney, AMC Theaters, Main Event, Barnes & Noble
110 The Oaks Mall 46% Gainesville, FL 342 233 325 - - 900 85.4% 265 Dillard's, Belk, JCPenney
111 The Parks Mall at Arlington 46% Arlington, TX 761 - 749 - 1 1,510 98% 350 Dillard's, Macy's, JCPenney, Nordstrom Rack, Dick's Sporting Goods
112 The Shoppes at River Crossing 45% Macon, GA 409 - 333 - - 742 88.9% 185 Dillard's, Belk, Dick's Sporting Goods
113 The Shops at La Cantera 34% San Antonio, TX 623 - 628 - 71 1,322 96.9% 235 Neiman Marcus, Nordstrom, Dillard's, Macy's
114 The Shops at The Bravern 36% Bellevue, WA 161 125 - - - 286 95.5% 103 Hermes, Louis Vuitton, Gucci, Lifetime Fitness
115 The SoNo Collection 12% Norwalk, CT 373 300 - - - 673 86.8% 78 Nordstrom, Bloomingdale's, Lillian August
116 Tucson Mall (1) 46% Tucson, AZ 618 - 641 27 - 1,287 90% 297 Dillard's, Macy's, JCPenney, Dick's Sporting Goods
117 Westroads Mall 46% Omaha, NE 517 173 356 - - 1,046 95.6% 317 Von Maur, JCPenney, AMC Theaters, Dick's Sporting Goods
118 Whaler's Village 45% Lahaina, HI 111 - - - 9 120 94.3% 54 Louis Vuitton, Lululemon, Leilani's, Hula Grill
119 White Marsh Mall 46% Baltimore, MD 434 257 466 - - 1,158 91% 318 Macy's, Macy's Home Store, Boscov's, JCPenney, Dave & Buster's
120 Willowbrook Mall 45% Houston, TX 520 - 984 - - 1,504 96.5% 235 Dillard's, Macy's, JCPenney, Dick's Sporting Goods
Property
Count Property Name BPYU Ownership (2) Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Stores (3)
121 Woodbridge Center 46% Woodbridge, NJ 629 458 561 - - 1,649 93.7% 501 Macy's, Lord & Taylor, Boscov's, JCPenney, Dick's Sporting Goods
Total Unconsolidated Retail Properties 30,361 9,095 22,801 501 1,622 64,380 93.5% 18,239
Total Retail Properties 56,098 17,316 42,626 1,498 2,267 119,805 96.4% 50,210
OTHER RETAIL PROPERTIES
Property Count Property Name BPYU Ownership Location Mall and Freestanding GLA Anchor GLA (BPYU Owned) Anchor GLA (Tenant Owned) Strip Center GLA Office GLA Total GLA Retail Percentage Leased Proportionate GLA Key Store
122 Shopping Leblon 32% Rio de Janeiro, Brazil 221 64 - - - 286 99.3% 90
Total 56,319 17,380 42,626 1,498 2,267 120,091 92.6% 50,300
_______________________________________________________________________________
(1) A portion of the property is subject to a ground lease.
(2) BPYU Ownership is shown net of the noncontrolling interest of our institutional investor (Note 3).
(3) Stores identified by management as significant due to size, market significance, traffic generation, rent impact or other reasons.
(4) Property conveyed to the lender subsequent to December 31, 2020.
MORTGAGES, NOTES AND OTHER DEBT
The following table sets forth certain information regarding the mortgages and other indebtedness encumbering BPYU's consolidated properties and its Unconsolidated Real Estate Affiliates, as well as its unsecured corporate debt (dollars in millions).
Property Name Location Interest
Rate Maturity Date (1) BPYU
Ownership (2) Proportionate
Total 2021 2022 2023 2024 2025 Thereafter Mortgage Details
Consolidated Property Level
Mall St. Matthews Louisville,KY 2.72% January 2021 90% $ 154 $ 154 - $ - $ - $ - $ - Fixed
Water Tower Place Chicago,IL 4.32% April 2021 85% 306 306 - - - - - Fixed
Deerbrook Mall Humble (Houston),TX 5.25% April 2021 90% 116 116 - - - - - Fixed
Brass Mill Center Waterbury,CT 3.41% April 2021 90% 57 57 - - - - - Floating
Columbia Mall Columbia,MO 3.41% April 2021 90% 39 39 - - - - - Floating
Eastridge Casper,WY 3.41% April 2021 90% 37 37 - - - - - Floating
Four Seasons Greensboro,NC 3.41% April 2021 90% 26 26 - - - - - Floating
Grand Teton Mall Idaho Falls,ID 3.41% April 2021 90% 37 37 - - - - - Floating
Mayfair Wauwatosa (Milwaukee),WI 3.41% April 2021 90% 297 297 - - - - - Floating
Mondawmin Mall Baltimore,MD 3.41% April 2021 90% 73 73 - - - - - Floating
North Town Mall Spokane,WA 3.41% April 2021 90% 74 74 - - - - - Floating
Oakwood Eau Claire,WI 3.41% April 2021 90% 61 61 - - - - - Floating
Oakwood Center Gretna,LA 3.41% April 2021 90% 74 74 - - - - - Floating
Pioneer Place Portland,OR 3.41% April 2021 90% 109 109 - - - - - Floating
Quail Springs Mall Oklahoma City,OK 3.41% April 2021 90% 56 56 - - - - - Floating
River Hills Mall Mankato,MN 3.41% April 2021 90% 59 59 - - - - - Floating
Sooner Mall Norman,OK 3.41% April 2021 90% 60 60 - - - - - Floating
Southwest Plaza Littleton (Denver),CO 3.41% April 2021 90% 99 99 - - - - - Floating
Providence Place Providence,RI 5.65% May 2021 85% 275 275 - - - - - Fixed
Town East Mall Mesquite (Dallas),TX 3.57% June 2021 90% 145 145 - - - - - Fixed
Visalia Mall Visalia,CA 3.71% June 2021 90% 67 67 - - - - - Fixed
Oxmoor Center Louisville,KY 5.37% June 2021 85% 68 68 - - - - - Fixed
Rivertown Crossings Grandville (Grand Rapids),MI 5.19% June 2021 90% 119 119 - - - - - Fixed
Tysons Galleria McLean (Washington, D.C.),VA 4.06% September 2021 90% 252 252 - - - - - Fixed
Park City Center Lancaster (Philadelphia),PA 4.00% September 2021 90% 110 110 - - - - - Floating
Westlake Center - Land Seattle,WA 12.90% November 2021 90% 2 2 - - - - - Fixed
530 Fifth Avenue New York,NY 3.41% November 2021 87% 95 95 - - - - - Floating
Property Name Location Interest
Rate Maturity Date (1) BPYU
Ownership (2) Proportionate
Total 2021 2022 2023 2024 2025 Thereafter Mortgage Details
200 Lafayette New York,NY 3.16% November 2021 90% 16 16 - - - - - Floating
Bellis Fair Bellingham (Seattle),WA 5.23% February 2022 90% 72 - 72 - - - - Fixed
The Shoppes at Buckland Hills Manchester,CT 5.19% March 2022 90% 101 - 101 - - - - Fixed
The Streets at SouthPoint Durham,NC 4.36% May 2022 85% 194 - 194 - - - - Fixed
Spokane Valley Mall Spokane,WA 4.65% June 2022 90% 45 - 45 - - - - Fixed
830 North Michigan Chicago,IL 4.00% July 2022 90% 65 - 65 - - - - Floating
Greenwood Mall Bowling Green,KY 4.19% July 2022 90% 54 - 54 - - - - Fixed
Westlake Center Seattle,WA 2.66% July 2022 90% 44 - 44 - - - - Floating
North Star Mall San Antonio,TX 3.93% August 2022 90% 256 - 256 - - - - Fixed
Coral Ridge Mall Coralville (Iowa City),IA 5.71% September 2022 90% 86 - 86 - - - - Fixed
Coastland Center Naples,FL 3.76% November 2022 90% 98 - 98 - - - - Fixed
Pecanland Mall Monroe,LA 3.88% March 2023 90% 73 - - 73 - - - Fixed
Crossroads Center (MN) St. Cloud,MN 3.25% April 2023 90% 80 - - 80 - - - Fixed
Meadows Mall Las Vegas,NV 3.96% July 2023 90% 121 - - 121 - - - Fixed
Prince Kuhio Plaza Hilo,HI 4.10% July 2023 90% 35 - - 35 - - - Fixed
Staten Island Mall Staten Island,NY 4.77% September 2023 90% 203 - - 203 - - - Fixed
Stonestown Galleria San Francisco,CA 4.39% October 2023 90% 157 - - 157 - - - Fixed
605 North Michigan Avenue Chicago,IL 4.76% December 2023 90% 72 - - 72 - - - Fixed
Jordan Creek Town Center West Des Moines,IA 4.37% January 2024 90% 174 - - - 174 - - Fixed
Fox River Mall Appleton,WI 4.35% June 2024 90% 143 - - - 143 - - Fixed
730 Fifth Avenue New York ,NY 5.28% September 2024 90% 729 - - - 729 - - Floating
Hulen Mall Fort Worth,TX 2.96% October 2024 90% 80 - - - 80 - - Floating
Shops at Merrick Park Coral Gables,FL 3.90% November 2024 90% 352 - - - 352 - - Fixed
Park Meadows Lone Tree,CO 3.56% November 2024 90% 632 - - - 632 - - Fixed
Valley Plaza Mall Bakersfield,CA 3.75% March 2025 90% 206 - - - - 206 - Fixed
Willowbrook Mall Wayne,NJ 3.55% March 2025 90% 325 - - - - 325 - Fixed
Beachwood Place Beachwood,OH 3.94% March 2025 90% 185 - - - - 185 - Fixed
Towson Town Center Towson,MD 3.82% August 2025 90% 281 - - - - 281 - Fixed
Paramus Park Paramus,NJ 4.07% September 2025 90% 108 - - - - 108 - Fixed
Peachtree Mall Columbus,GA 3.94% December 2025 90% 64 - - - - 64 - Fixed
Perimeter Mall Atlanta,GA 3.96% September 2026 90% 248 - - - - - 248 Fixed
North Point Mall Alpharetta (Atlanta),GA 4.54% September 2026 90% 223 - - - - - 223 Fixed
Mall of Louisiana Baton Rouge,LA 3.98% August 2027 90% 292 - - - - - 292 Fixed
Property Name Location Interest
Rate Maturity Date (1) BPYU
Ownership (2) Proportionate
Total 2021 2022 2023 2024 2025 Thereafter Mortgage Details
Providence Place - Other Providence,RI 7.75% July 2028 85% 24 - - - - - 24 Fixed
685 Fifth Avenue New York,NY 4.53% July 2028 88% 241 - - - - - 241 Fixed
The Woodlands Woodlands (Houston),TX 4.35% August 2029 90% 416 - - - - - 416 Fixed
Norwalk Norwalk,CT 2.00% December 2037 90% 3 - - - - - 3 Fixed
Consolidated Property Level $ 9,365 $ 2,883 $ 1,015 $ 741 $ 2,110 $ 1,169 $ 1,447
Unconsolidated Property Level
Kenwood Towne Centre Cincinnati,OH 5.37% February 2021 63% $ 124 $ 124 - $ - $ - $ - $ - Fixed
The Shops at The Bravern Bellevue,WA 2.47% March 2021 36% 20 20 - - - - - Floating
Miami Design District Misc Miami,FL 8.88% March 2021 20% 40 40 - - - - - Floating
Willowbrook Mall (TX) Houston,TX 5.13% April 2021 45% 81 81 - - - - - Fixed
White Marsh Mall Baltimore,MD 3.66% May 2021 46% 87 87 - - - - - Fixed
Park Place Tucson,AZ 5.18% May 2021 46% 77 77 - - - - - Fixed
Tucson Mall Tucson,AZ 4.01% June 2021 46% 113 113 - - - - - Fixed
Fashion Place Murray,UT 3.64% June 2021 46% 104 104 - - - - - Fixed
Northbrook Court Northbrook,IL 4.25% November 2021 45% 53 53 - - - - - Fixed
Fashion Show - Other Las Vegas, 6.06% November 2021 45% 1 1 - - - - - Fixed
Northridge Fashion Center Northridge (Los Angeles),CA 5.10% December 2021 46% 96 96 - - - - - Fixed
Whaler's Village Lahaina,HI 5.42% January 2022 45% 36 - 36 - - - - Fixed
Ala Moana Center Honolulu,HI 4.23% April 2022 45% 632 - 632 - - - - Fixed
The Gallery at Harborplace Baltimore,MD 5.24% May 2022 46% 32 - 32 - - - - Fixed
Florence Mall Florence (Cincinnati, OH),KY 4.15% June 2022 45% 41 - 41 - - - - Fixed
Clackamas Town Center Happy Valley,OR 4.18% October 2022 45% 97 - 97 - - - - Fixed
The Oaks Mall Gainesville,FL 4.55% October 2022 46% 54 - 54 - - - - Fixed
Westroads Mall Omaha,NE 4.55% October 2022 46% 62 - 62 - - - - Fixed
The Shoppes at River Crossing Macon,GA 3.75% March 2023 45% 33 - - 33 - - - Fixed
Ala Moana Expansion Honolulu,HI 3.80% May 2023 45% 226 - - 226 - - - Fixed
Cumberland Mall Atlanta,GA 3.67% May 2023 46% 74 - - 74 - - - Fixed
Property Name Location Interest
Rate Maturity Date (1) BPYU
Ownership (2) Proportionate
Total 2021 2022 2023 2024 2025 Thereafter Mortgage Details
Carolina Place Pineville (Charlotte),NC 3.84% June 2023 45% 72 - - 72 - - - Fixed
Oglethorpe Mall Savannah,GA 3.90% July 2023 46% 66 - - 66 - - - Fixed
Augusta Mall Augusta,GA 4.36% August 2023 46% 78 - - 78 - - - Fixed
The SoNo Collection Norwalk,CT 4.75% August 2023 12% 36 - - 36 - - - Floating
Ridgedale Center Minnetonka,MN 2.76% September 2023 46% 77 - - 77 - - - Floating
Riverchase Galleria Birmingham,AL 3.66% September 2023 46% 76 - - 76 - - - Floating
Apache Mall Rochester,MN 3.66% September 2023 46% 34 - - 34 - - - Floating
Columbiana Centre Columbia,SC 3.66% September 2023 46% 63 - - 63 - - - Floating
One Union Square San Francisco,CA 5.12% October 2023 45% 23 - - 23 - - - Fixed
Boise Towne Square Boise,ID 4.79% October 2023 46% 53 - - 53 - - - Fixed
Galleria at Tyler Riverside,CA 5.05% November 2023 45% 75 - - 75 - - - Fixed
Oakbrook Center Oak Brook (Chicago),IL 3.68% November 2023 43% 204 - - 204 - - - Floating
The Crossroads (MI) Portage,MI 4.42% December 2023 46% 41 - - 41 - - - Fixed
The Mall in Columbia Columbia,MD 4.75% December 2023 45% 113 - - 113 - - - Floating
Woodbridge Center Woodbridge,NJ 4.80% April 2024 46% 110 - - - 110 - - Fixed
The Maine Mall South Portland,ME 4.66% April 2024 46% 108 - - - 108 - - Fixed
Governor's Square Tallahassee,FL 3.56% May 2024 46% 28 - - - 28 - - Floating
Coronado Center Albuquerque,NM 3.56% May 2024 46% 101 - - - 101 - - Floating
Lynnhaven Mall Virginia Beach,VA 3.56% May 2024 46% 108 - - - 108 - - Floating
Stonebriar Centre Frisco (Dallas),TX 4.05% August 2024 45% 119 - - - 119 - - Fixed
Baybrook Mall Friendswood (Houston),TX 5.52% September 2024 46% 106 - - - 106 - - Fixed
The Parks Mall at Arlington Arlington (Dallas),TX 5.57% September 2024 46% 106 - - - 106 - - Fixed
Fashion Show Las Vegas,NV 4.03% November 2024 45% 377 - - - 377 - - Fixed
Natick Mall Natick (Boston),MA 3.72% November 2024 45% 228 - - - 228 - - Fixed
Market Place Shopping Center Champaign,IL 3.11% November 2024 46% 40 - - - 40 - - Floating
Pinnacle Hills Promenade Rogers,AR 4.13% January 2025 45% 49 - - - - 49 - Fixed
Altamonte Mall Altamonte Springs (Orlando),FL 3.72% February 2025 45% 69 - - - - 69 - Fixed
Pembroke Lakes Mall Pembroke,FL 3.56% March 2025 46% 120 - - - - 120 - Fixed
Alderwood Lynnwood (Seattle),WA 3.48% June 2025 45% 142 - - - - 142 - Fixed
Boise Towne Plaza Boise,ID 4.13% August 2025 46% 8 - - - - 8 - Fixed
Glenbrook Square Fort Wayne,IN 4.27% November 2025 46% 72 - - - - 72 - Fixed
Glendale Galleria Glendale,CA 4.06% September 2026 45% 193 - - - - - 193 Fixed
Property Name Location Interest
Rate Maturity Date (1) BPYU
Ownership (2) Proportionate
Total 2021 2022 2023 2024 2025 Thereafter Mortgage Details
The Shops at La Cantera San Antonio, Bexar County,TX 3.60% May 2027 34% 118 - - - - - 118 Fixed
Baybrook Expansion Friendswood,TX 3.77% December 2027 26% 37 - - - - - 37 Fixed
Christiana Mall Newark,DE 4.28% August 2028 23% 124 - - - - - 124 Fixed
Plaza Frontenac St. Louis,MO 4.43% August 2028 50% 50 - - - - - 50 Fixed
Saint Louis Galleria St. Louis,MO 5.08% November 2028 66% 171 - - - - - 171 Fixed
The Grand Canal Shoppes Las Vegas,NV 4.29% July 2029 45% 441 - - - - - 441 Fixed
First Colony Mall Sugarland,TX 3.55% November 2029 45% 99 - - - - - 99 Fixed
Miami Design District Miami,FL 4.13% March 2030 20% 100 - - - - - 100 Fixed
Unconsolidated Property Level $ 6,318 $ 796 $ 954 $ 1,344 $ 1,431 $ 460 $ 1,333
Corporate
BPYU Term Loan A-1 N/A 3.14% August 2021 90% $ 23 $ 23 - $ - $ - $ - $ - Floating
Project Gold - Revolver N/A 2.41% August 2022 90% 916 - 916 - - - - Floating
Subordinated Unsecured Note ($25M) N/A 2.09% August 2022 90% 23 - 23 - - - - Floating
BPYU Term Loan A-2 N/A 3.15% August 2023 90% 1,805 - - 1,805 - - - Floating
BPYU Term Loan B N/A 2.65% August 2025 90% 1,760 - - - - 1,760 - Floating
Senior Secured Notes - Silver Bonds N/A 5.75% May 2026 90% 853 - - - - - 853 Floating
Subordinated Unsecured Note ($27M) N/A 2.98% February 2030 90% 7 - - - - - 7 Floating
Subordinated Unsecured Note ($29M) N/A 2.98% March 2030 90% 27 - - - - - 27 Floating
Total Corporate $ 5,600 $ 23 $ 939 $ 1,805 $ - $ 1,760 $ 1,073
Total $ 21,283 $ 3,702 $ 2,908 $ 3,890 $ 3,541 $ 3,389 $ 3,853
_______________________________________________________________________________
(1) Assumes that all maturity extensions are exercised.
(2) BPYU Ownership is shown net of the noncontrolling interest of our institutional investor (Note 3).
Below is a reconciliation of our proportionate share of mortgages, notes and loans payable (from above) to our consolidated mortgages, notes and loans payable per our Consolidated Balance Sheet as of December 31, 2020 (dollars in millions).
Total Maturities, from above $ 21,283
Debt related to solar projects and other 18
Proportionate Portfolio Debt 21,301
Deferred financing costs, market rate adjustments and other, net (103)
Debt held for disposition (247)
Junior Subordinated Notes Due 2036 (206)
Proportionate Mortgages, Notes and Loans Payable $ 20,745
BPYU Share of Unconsolidated Real Estate Affiliates (6,318)
Noncontrolling Interests 1,688
Consolidated Mortgages, Notes and Loans Payable on US GAAP Basis $ 16,115
Lease Expiration Schedule
The following table indicates various lease expiration information related to our retail properties owned as of December 31, 2020. The table excludes expirations and rental revenue from temporary tenants and tenants that pay percent-in-lieu rent. See "Note 2-Summary of Significant Accounting Policies" for our accounting policies for revenue recognition from our tenant leases and "Note 7-Leases" for the future minimum rentals of our operating leases for the consolidated properties (dollars in millions).
Year Number of
Expiring
Leases Expiring GLA
at 100% Percent of
Total Expiring
Rent Expiring
Rent ($psf)
Specialty Leasing 1,069 2,564 4.9% $ 36,925 $ 14.40
2021 1,699 5,461 10.5% 302,716 55.44
2022 1,893 7,011 13.5% 340,974 48.63
2023 1,504 6,217 12.0% 340,533 54.78
2024 1,348 7,043 13.6% 349,653 49.65
2025 1,183 4,940 9.5% 355,600 71.99
2026 856 4,236 8.2% 298,937 70.57
2027 675 3,755 7.2% 276,088 73.52
2028 579 2,997 5.8% 192,719 64.30
2029 493 2,846 5.5% 171,160 60.15
Subsequent 809 4,824 9.3% 266,209 55.19
Total 12,108 51,892 100.0% $ 2,931,514 $ 56.49
Vacant Space 1,737 4,206
Mall and Freestanding GLA 13,845 56,098

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In management's opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material effect on our consolidated financial position, results of operations or liquidity.
The Company is subject to litigation related to the BPY Transaction. The Company cannot predict the outcome of pending litigation, nor can it predict the amount of time and expense that will be required to resolve such litigation.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Class A Stock is listed on the Nasdaq under the symbol "BPYU." As of February 24, 2021, we had approximately 329 stockholders of record of Class A Stock. Our Class B-1 Stock and Class B-2 Stock (together, the "Class B Stock"), Series B Preferred Stock and Class C Stock are not listed.
See Note 11 for information regarding shares of our Class A Stock that may be issued under our equity compensation plans as of December 31, 2020 and Note 9 for information regarding redemptions of the units of BPR OP, LP ("BPROP") held by limited partners for Class A Stock.
The following line graph sets forth the cumulative total returns on a $100 investment in each of the common stock of GGP Inc. (prior to August 28, 2018) and the Class A Stock of BPYU (on and subsequent to August 28, 2018), S&P 500 and the FTSE National Association of REITs-Equity REITs from December 31, 2015 through December 31, 2020.
Total Return Performance (1)
December 2015 to December 2020
_____________________________________________________________________________
(1) Excludes the 2018 Pre-Closing Dividend.
As Of December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020
BPYU Cum $ 100 95 93 68 83 74
Return % (4.53) (7.07) (32.40) (17.00) (25.94)
FTSE Nareit Equity REIT Index Cum $ 100 109 114 109 137 126
Return % 8.52 14.19 8.91 37.23 26.25
S&P 500 Index Cum $ 100 112 136 130 171 203
Return % 11.96 36.40 30.42 71.49 103.04
Unregistered Sales of Equity Securities and Use of Proceeds
In the third quarter of 2020, BPYU issued 19,367,288 shares of Class B-1 Stock to BPR FIN I Subco LLC, a related party, due to total contributions of $414.3 million, equal to $21.39 per share.
In the fourth quarter of 2020, BPYU issued 5,513,266 shares of Class B-1 Stock to BPR FIN I Subco LLC, a related party, due to total contributions of 117.9 million, equal to $21.39 per share.
The Company used the proceeds to repay unsecured corporate debt, repurchase Class A Stock, and fund shareholder dividends. The issuance of the Class B-1 Stock was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
Recent Purchases of Equity Securities
Period (a) Total number of shares (or units) purchased (b) Average price paid per share (or unit) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
October 1 - October 31, 2020 2,613,565 13.32 2,613,565 (1)
November 1 - November 30, 2020 - - - (1)
December 1 - December 31, 2020 - - - (1)
Total $ 2,613,565 $ 13.32 $ 2,613,565 (2)
_______________________________________________________________________________
(1)On August 5, 2020, the Company’s Board of Directors authorized the repurchase of the greater of (i) 5% of the Company’s Class A Stock that are issued or outstanding or (ii) 10% of its public float of Class A Stock over the next 12 months from time to time as market conditions warrant.
(2)As of August 5, 2020, the number of shares of Class A Stock comprising 10% of the Company's public float was greater than 5% of the Company's issued and outstanding Class A Stock, and was equal to 5,219,854 shares of Class A Stock. As of December 31, 2020, zero shares of Class A Stock were available for repurchase under the Company's stock repurchase plan.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data which should be read in conjunction with the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report.
Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016
(Dollars in thousands, except per share amounts)
OPERATING DATA (1)
Total revenues $ 1,529,545 $ 1,563,968 $ 2,064,034 $ 2,327,862 $ 2,346,446
Total expenses 1,447,488 1,373,886 1,636,358 1,489,605 1,546,193
Income from continuing operations (801,584) 480,911 4,163,769 666,873 1,308,273
Net (loss) income attributable to Brookfield Property REIT Inc. (711,461) 432,880 4,090,541 657,334 1,288,367
Common Stock Basic Earnings Per Share (Through August 27, 2018):
Continuing operations $ - $ - $ 4.16 $ 0.72 $ 1.44
Common Stock Diluted Earnings Per Share (Through August 27, 2018):
Continuing operations $ - $ 4.15 $ 0.68 $ 1.34
Class A dividends declared per share (August 28, 2018 through December 31, 2020) (Note 9) (1) $ 1.33 $ 1.32 $ 0.63 $ - $ -
Common stock Dividends declared per share (August 28, 2018) (Note 9) (2) $ - $ - $ 0.44 $ 0.88 $ 1.06
FUNDS FROM OPERATIONS ("FFO") (3) $ 484,191 $ 674,213 $ 1,569,283 $ 1,530,590 $ 1,500,848
CASH FLOW DATA (1) (4)
Operating activities $ (8,430) $ 428,129 $ 584,549 $ 1,294,612 $ 1,136,151
Investing activities $ (252,832) $ (1,328,958) $ 2,697,130 $ (855,296) $ 521,411
Financing activities $ 354,360 $ 877,648 $ (3,214,925) $ (738,263) $ (1,564,114)
As of December 31,
2020 2019 2018 2017 2016
BALANCE SHEET DATA
Investment in real estate assets-cost $ 22,188,924 $ 22,474,919 $ 19,443,057 $ 24,821,824 $ 23,278,210
Total assets 21,879,964 21,973,386 19,033,526 23,347,526 22,732,746
Total debt 16,320,786 16,109,094 12,795,849 13,038,659 12,636,618
Redeemable noncontrolling interests 60,826 62,235 73,696 248,126 262,727
Stockholders' equity 1,843,286 1,762,367 1,221,826 8,795,660 8,635,764
_______________________________________________________________________________
(1) Cash flow data only represents BPYU's consolidated cash flows as defined by generally accepted accounting principles ("GAAP") and as such, operating cash flow does not include the cash received from our Unconsolidated Real Estate Affiliates, except to the extent of contributions to or distributions from our Unconsolidated Real Estate Affiliates.
(2) Excludes the Pre-Closing Dividend.
(3) FFO (as defined below) are presented at our proportionate share and do not represent cash flows from operations as defined by GAAP.
(4) We adopted accounting guidance which requires that the statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. This resulted in the reclassification of restricted cash within the statement of cash flows for all periods presented.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and whose descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as in such Notes.
Overview-Introduction
We own a property portfolio comprised primarily of Class A retail properties (defined primarily by sales per square foot). As of December 31, 2020, we owned, either entirely or with joint venture partners, 121 retail properties located throughout the United States comprising approximately 120 million square feet of gross leasable area or GLA.
Our primary objective is to be an owner and operator of best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers and consumers. Our strategy includes:
•increasing the permanent occupancy of our regional mall portfolio by converting temporary leases to permanent leases and leasing vacant space;
•renewing or replacing expiring leases at greater rental rates;
•actively recycling capital through the disposition of assets; investing in whole or partial interests in high-quality regional malls, anchor pads, and our development pipeline and repaying debt; and
•continuing to execute on our existing redevelopment projects and seeking additional opportunities within our portfolio for redevelopment.
Despite the recent economic disruption caused by COVID-19, we expect that the high quality nature of our stabilized properties and associated cash flows will continue to be in demand from investors, although our ability to execute on recycling of capital initiatives will likely be impacted in the short term.
As of December 31, 2020, the portfolio was 92.5% leased, compared to 96.4% leased at December 31, 2019. On a suite-to-suite basis, the leases commencing occupancy in the trailing 12 months exhibited initial rents that were 1.1% higher than the final rents paid on expiring leases.
Overview-Financial
The COVID-19 pandemic has spread globally, and has caused a global economic shutdown. The actions taken in response to the shutdown have interrupted business activities and supply chains; disrupted travel; contributed to significant volatility in the financial markets, resulting in a general decline in equity prices and lower interest rates; impacted social conditions; and adversely impacted local, regional, national and international economic conditions, as well as the labor markets. Accordingly, we caution you that our financial position and consolidated performance presented below may not be indicative of our results in future periods as a result of the ongoing and developing COVID-19 pandemic and its resulting impact on the global economy.
Net income attributable to BPYU decreased 264.4% from $432.9 million for the year ended December 31, 2019 to $(711.5) million for the year ended December 31, 2020 primarily due to the increase in equity in loss of unconsolidated real estate affiliates and the decrease in gains on the sale of unconsolidated properties.
See Non-GAAP Supplemental Financial Measures below for a discussion of funds from operations ("FFO"), along with a reconciliation to Net (loss) income attributable to BPYU.
Operating Metrics
The following table summarizes selected operating metrics for our portfolio.
December 31, 2020 (1) December 31, 2019 (1)
In-Place Rents Per Square Foot (all less anchors) (2) $ 61.29 $ 61.70
In-Place Rents Per Square Foot (<10K square feet) (2) $ 80.43 $ 79.84
Percentage Occupied for Total Retail Properties 92.1 % 96.0 %
Percentage Leased for Total Retail Properties 92.5 % 96.4 %
_______________________________________________________________________________
(1) Metrics exclude properties acquired in the year ended December 31, 2020 and the December 31, 2019, reductions in ownership as a result of sales or other transactions, and certain redevelopments and other properties.
(2) Rent is presented on a cash basis and consists of base minimum rent and common area costs.
Lease Spread Metrics
The following tables summarize signed leases compared to expiring leases in the same suite, for leases where (1) the downtime between new and previous tenant was less than 24 months, (2) the occupied space between the previous tenant and new tenant did not change by more than 10,000 square feet and (3) the new lease term is at least a year.
Number of Leases Square Feet (in thousands) Term/Years Initial Rent Per Square Foot (1) Expiring Rent Per Square Foot (2) Initial Rent Spread % Change
Trailing 12 Month Commencements 717 2,553 6.5 $ 52.30 $ 51.47 $ 0.55 1.1 %
_______________________________________________________________________________
(1) Represents initial annual rent over the lease consisting of base minimum rent and common area maintenance.
(2) Represents expiring rent at end of lease consisting of base minimum rent and common area maintenance.
Results of Operations
Year Ended December 31, 2020 and 2019
Rental revenues increased $18.2 million, primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $152.8 million increase in rental revenues during 2020 compared to 2019 (Note 3). This is offset by decreases in rental revenues across the portfolio during 2020 compared to 2019 .
Management fees and other corporate revenues decreased $41.4 million, primarily due to a decrease in gross receipts across the portfolio during 2020 compared to 2019.
Real estate taxes increased $21.7 million, primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $14.9 million increase in real estate taxes during 2020 compared to 2019 (Note 3). In addition, the acquisition of an additional interest at one property in the third quarter of 2019 resulted in $3.2 million increase in real estate taxes during 2020 compared to 2019 (Note 3).
The provision for impairment of $133.7 million during 2020 is related to impairment charges recorded on two operating properties and the provision of impairment of $223.1 million during 2019 is related to impairment charges recorded on two operating properties (Note 2).
Depreciation and amortization increased $140.0 million primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $120.9 million increase in depreciation and amortization during 2020 compared to 2019 (Note 3).
Loss from changes in control of investment properties of $15.4 million during 2020 is related to the acquisition of an additional interest at one property (Note 3). The gain from changes in control of investment properties of $720.7 million during 2019 is related to the acquisition of four operating properties which had been Unconsolidated Real Estate Affiliates from its former joint venture partners in the properties (affiliates of JPMorgan Chase & Co. ("JPM") and New York State Teachers' Retirement System ("NYSTRS")) and resulting in the Company obtaining control over the entities and consolidating the properties
beginning on the transaction date ("JPM Transaction") in the fourth quarter of 2019 (Note 3) and the acquisition of an additional interest at one property in the third quarter of 2019 (Note 3).
The gain on extinguishment of debt of $14.3 million during 2020 is related to the debt buyback transactions that occurred in second quarter of 2020 (Note 6). The loss on extinguishment of debt of $27.5 million during 2019 is due to a pre-payment penalty related to the refinance at one property (Note 6).
Benefit from income taxes reflects an increase in 2020 of $45.1 million compared to 2019 primarily due to an adjustment to our prior year deferred taxes. Additionally, there was an increase in income tax benefit driven by the negative impact to operations from the COVID-19 pandemic.
Equity in loss of Unconsolidated Real Estate Affiliates of $180.6 million during 2020 is primarily related to impairment charges on four unconsolidated operating properties (Note 5) and a loss of revenues.
Unconsolidated Real Estate Affiliates - loss on investment of $51.8 million during 2020 is primarily related to the impairment charge on one investment property (Note 2).
Year Ended December 31, 2019 and 2018
Rental revenues decreased by $530.3 million primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018. The joint ventures resulted in a $503.2 million decrease in rental revenues during 2019 compared to 2018. In addition, the sale of our partial interest at one operating property in the fourth quarter of 2018 resulted in a $10.2 million decrease in rental revenues during 2019 as compared to 2018 as the property is now accounted for in Unconsolidated Real Estate Affiliates (Note 3).
Management fees and other corporate revenues increased $40.7 million, primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018. The joint ventures resulted in a $38.7 million increase in property management and leasing fees during 2019 compared to 2018 (Note 3).
Real estate taxes decreased $50.1 million, primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018. The joint ventures resulted in a $54.1 million decrease in real estate taxes during 2019 compared to 2018 (Note 3).
Other property operating costs decreased $73.9 million, primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018. The joint ventures resulted in a $78.2 million decrease in other property operating costs during 2019 compared to 2018 (Note 3).
Property management and other costs increased $56.6 million primarily due to an increase in salaries and bonuses, corporate office rent and management fees.
The provision for impairment of $223.1 million during 2019 is related to impairment charges recorded on two operating properties and the provision of impairment of $45.9 million during 2018 is related to impairment charges recorded on one property (Note 2).
Depreciation and amortization decreased $131.4 million primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018. The joint ventures resulted in a $160.1 million decrease in depreciation and amortization during 2019 compared to 2018 (Note 3). The development projects related to one operating property resulted in an offsetting $13.2 million increase in depreciation expense during 2019 compared to 2018.
Interest expense increased $101.8 million primarily due to a $210.6 million increase in interest expense on the new credit agreement entered into during the third quarter of 2018 (Note 6). The acquisition of an additional interest at one operating property from our joint venture partner during the third quarter of 2019 resulted in a $16.9 million increase in interest expense during 2019 compared to 2018 (Note 3). This was partially offset by the joint venture transactions related to the BPY Transaction in the third quarter of 2018. This resulted in a $134.4 million decrease in interest expense during 2019 compared to 2018 (Note 3). In addition, the sale of our partial interest at one operating property in the fourth quarter of 2018 resulted in $8.1 million decrease in interest expense during 2019 compared to 2018 as the property is now accounted for as Unconsolidated Real Estate Affiliates (Note 3).
The gain from changes in control of investment properties and other, net of $720.7 million during 2019 is due to the JPM Transaction in the fourth quarter of 2019 (Note 3).
The loss on extinguishment of debt during 2019 relates to a pre-payment penalty related to the refinance at one property (Note 6).
Benefit from income taxes reflects a decrease in 2019 of $603.9 million as compared to 2018 due to the recognition of deferred taxes related to certain transactions effectuated in the BPY Transaction in 2018 (Note 3).
Equity in income of Unconsolidated Real Estate Affiliates decreased by $67.0 million primarily due to a decrease in income recognition on condominiums and decrease in income related to joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018 (Note 3).
Unconsolidated Real Estate Affiliates - gain on investment of $240.4 million during 2019 relates to the JPM Transaction, the sale of our 12.0% interest in Bayside Marketplace and the 49.3% sale of our interest in Authentic Brands Group LLC ("ABG") (Note 3).
Liquidity and Capital Resources
Our primary source of cash is from the ownership and management of our properties and strategic dispositions. In addition, we will also use financings as a source of capital. We may generate cash from refinancings or borrowings under our revolving credit facility (the "Facility"). Our primary uses of cash include payment of operating expenses, debt service, reinvestment in and redevelopment of properties, tenant allowances, dividends, share repurchases and strategic acquisitions.
We anticipate maintaining financial flexibility by managing our future maturities and amortization of debt. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $204.5 million of consolidated unrestricted cash and $485.0 million of available credit under our revolving credit facility as of December 31, 2020, as well as anticipated cash provided by operations.
Our key financing objectives include:
•to obtain property-secured debt with laddered maturities; and
•to minimize the amount of debt that is cross-collateralized and/or recourse to us.
We may raise capital through public or private issuances of debt securities, preferred stock, Class A Stock, units of limited partnership interest in BPR OP, LP ("BPROP"), or other capital raising activities. In addition, we or our affiliates may repurchase our shares or corporate debt and bonds.
The future impact of the global economic shutdown on our level of liquidity is uncertain at this time. Measures undertaken by governments and companies in our principal markets resulted in the temporary closure of many of our operating assets, with the vast majority of the assets having now reopened. The duration of any such continuing measures or the re-imposition of such measure in the future may impact our ability to collect rental income in our retail assets. The longer-term impact of the shutdown and resulting economic downturn could reduce demand for retail space.
Consequently, we are reviewing, and where appropriate adjusting, our current capital expenditure and financing assumptions on existing and future projects to reflect any potential shorter- and longer-term impact of the shutdown.
We are also reviewing contractual arrangements with our tenants to assess the rights and responsibilities of the Company and our tenants in response to the impact of the measures undertaken by governments and/or tenants. Potential responses may include, but are not limited to, extension of payment terms from tenants, adjustments to the duration of leases, payment holidays, and renegotiation of lease terms.
We expect to be able to refinance the majority of debt obligations maturing in the near term or to exercise contractual extension options thereon, although there is no guarantee we will be able to do so. In certain instances, we plan to seek certain modifications to mortgages, including lease restructuring approvals and technical default waivers, and potentially interest deferrals.
In addition, certain debt obligations are subject to financial covenants, and in the shorter-term, the shutdown may negatively impact our ability to meet such covenants. We are reviewing the financial covenants of each debt instrument and, where applicable, working with our lenders to address debt instruments which may potentially approach or breach covenant limits.
Such adjustments may include, but are not limited to, adjustment to the covenant limits, interest payment holidays, and temporary suspension of covenant testing.
In order to maintain financial flexibility, we maintain capacity under our Facility. As at December 31, 2020, the available capacity under such credit facility was $485.0 million. We believe we will be able to continue to borrow funds on the Facility when and as required.
The Company is party to a credit agreement (the "Credit Agreement") dated as of August 24, 2018 consisting the Facility, Term A-1 and A-2 loans, and a Term B loan. The Facility provides for revolving loans of up to $1.5 billion and borrowings bear interest at a rate equal to LIBOR plus 2.25%. The Facility is scheduled to mature in August 2022 and had outstanding borrowings of $1.0 billion as of December 31, 2020. The Term A-1 Loan has a total commitment outstanding of $900.0 million, with $700.0 million attributable to BPYU and $200.0 million attributable to an affiliate, and is scheduled to mature in August 2021, bearing interest at a rate equal to LIBOR plus 2.25%. During the year ended December 31, 2020, the Company made a principal payment of $9.0 million, and the remaining outstanding balance was $25.8 million. The Term A-2 Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2023, bearing interest at a rate equal to LIBOR plus 2.25%, and the outstanding balance on December 31, 2020 was $2.0 billion. The Term B Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2025 bearing interest at a rate equal to LIBOR plus 2.50%. During the year ended December 31, 2020, the Company made additional payments in the total amount of $25.0 million, and the outstanding balance of the Term B loan was $1,950.0 million. The Term A-1, A-2, and B Loans are contractually obligated to be prepaid through net proceeds from property level refinances and asset sales as outlined in the Credit Agreement.
The Credit Agreement contains certain restrictive covenants which limit material changes in the nature of our business conducted, including, but not limited to, mergers, dissolutions or liquidations, dispositions of assets, liens, incurrence of additional indebtedness, dividends, transactions with affiliates, prepayment of subordinated debt, negative pledges and changes in fiscal periods. In addition, we are required to maintain compliance with certain financial covenants related to a maximum net debt-to-value ratio and a minimum fixed-charge-coverage ratio, as defined in the Credit Agreement.
On July 29, 2020, the Company entered into the First Amendment of its Credit Agreement in order to give effect to certain amendments, including, but not limited to the following:
•The lenders agreed to certain covenant relief in respect of the financial covenants through the fiscal quarter ending June 30, 2021 (the "Covenant Relief Period"). The maximum total indebtedness to value ratio financial maintenance covenant was eliminated permanently. The minimum fixed charge coverage ratio was reduced to 1.20x during the Covenant Relief Period and increases to 1.35x thereafter.
•The applicable margin for the Term A Loans and the Facility is LIBOR plus 3.00% during the Covenant Relief Period - and thereafter, will be LIBOR plus 3.00% if the total net indebtedness to value ratio is greater than 70%.
•The Company agreed to maintain an ongoing liquidity covenant (set at $500 million) which will be tested as of the last day of each month against the amount of unrestricted cash, undrawn available amounts under the Facility and undrawn amounts under the new Brookfield Liquidity Facility. The Company has entered into and maintains a $500 million Brookfield Liquidity Facility (the "Brookfield Liquidity Facility") and prior to the date the Company demonstrates compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment, any interest and principal payments thereunder must be paid-in-kind.
•The Company is required to "match-fund" drawings under the Facility in excess of $1.0 billion using proceeds of either the Brookfield Liquidity Facility or issuances of qualified equity interests. The match-funding requirement is required to be made (i) monthly, whereby any drawing during that month is in excess of the prior highest balance of the revolver (in excess of $1.0 billion), (ii) within 10 business days of a request from the agent if as of any day during a month, the excess draw amount would exceed $10 million and (iii) at any time of request for a revolving loan that the excess would be $100 million or greater (which would be match-funded substantially concurrently with the requested revolving loan draw).
•The Company is required to make additional prepayments of the Term A loans with proceeds of certain equity, debt issuances and asset sales.
•The Company also agreed to a number of additional restrictions, including restrictions on incurring additional indebtedness, making of certain restricted payments and the use of proceeds under the revolving facility, which apply either through the end of the Covenant Relief Period - and in the case of certain provisions, until the Company demonstrates compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment.
As of December 31, 2020, we are not aware of any instances of non-compliance with such covenants. Though there is potential for a risk of default (see Note 18 for discussion specific to COVID-19), in the event the Company fails to maintain compliance
with its financial covenants, the Credit Agreement provides for a cure period, during which the Company has the opportunity to raise additional cash and reduce net debt balance, such as through capital contributions from BPY, or disposition of assets. Management has determined that in the event of a default, it is probable that these market-based alternatives would be available, and that these actions would provide the necessary cash flows to prevent or cure an event of default, although there is no guarantee that these market-based alternatives would be available.
On May 24, 2020, the Company executed a series of transactions to repurchase corporate debt on the open market, funded by intercompany loans from BPY. The total amounts of debt repurchased had a par value of $59.6 million, and a cash repurchase price of $45.3 million. Following each repurchase, the repurchased debt was formally cancelled. As a result of the debt repurchase and cancellation, the Company recognized a gain of $14.3 million included in gain on extinguishment of debt on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the twelve months ended December 31, 2020.
During the twelve months ended December 31, 2020, the Company suspended equity contributions to make contractual interest and/or principal payments on eighteen consolidated and unconsolidated property level mortgages, including one mortgage that is in maturity default. The Company is currently engaging in negotiations with the creditors on these mortgages to obtain potential lender concessions or other relief. If the Company is unsuccessful in obtaining concessions from these creditors, it is possible that the property securing these loans would be transferred to the lenders. In such circumstances, the carrying value of the property may no longer be recoverable and may trigger an impairment charge. These mortgages are non-recourse and the creditors do not have security claims against the Company aside from the collateral property. As of December 31, 2020, the Company has accrued $46.6 million of default interest related to these mortgages per contractual debt agreements.
As of December 31, 2020, the Company amended the agreement at one property (Note 6). In addition, the Company was unsuccessful in obtaining concessions from the creditor at one property and the loan was transferred to the lender (Note 3). In total, the Company has suspended equity contributions to make contractual interest and/or principal payments on a total of $1.6 billion of property level mortgages and the related Investment in Real Estate securing these loans has a carrying value of $1.7 billion.
During the year ended December 31, 2020:
On November 20, 2020 the Company closed on a new loan at The Mall in Columbia in the amount of $250.0 million with an interest rate at LIBOR plus 4.5% which matures on December 9, 2022, and has one year extension option . The loan replaced the previous debt of $317.0 million which matured on November 23, 2020. The transaction incurred fees in the amount of $3.7 million, which were capitalized.
On November 9, 2020 the Company closed on a new mortgage at Oakbrook Center in the amount of $319.0 million with an interest rate at LIBOR plus 2.31% and a mezzanine loan in the amount of $156.0 million with an interest rate at LIBOR plus 6.0%, respectively. Both loans which mature on November 9, 2022, and have one-year extension option. These loans replaced the previous debt of $425.0 million which matured on January 5,2021. The transaction incurred fees of $6.3 million which were capitalized.
On April 24, 2020, the Company completed a one-year extension of a $1.3 billion loan secured by cross-collateralized mortgages on 15 properties with an interest rate of LIBOR plus 1.75%, which matures on April 25, 2021. An extension fee of $1.6 million was paid in conjunction with the extension.
On February 28, 2020, the Company closed a new loan at the Miami Design District joint venture in the amount of $500.0 million with an interest rate of 4.13%, which matures on March 1, 2030. The loan replaced the previous debt of $480.0 million with an interest rate of LIBOR plus 2.50% that was scheduled to mature on May 14, 2021. As a result of the refinancing, the joint venture incurred $3.7 million of deferred financing costs that were capitalized.
During the year ended December 31, 2019:
On November 1, 2019 the Company closed a new mortgage loan at Merrick Park in amount of $390.0 million with a 5-year fixed interest rate at 3.90% which matures November 1, 2024. This loan replaced the previous debt of $161.0 million with a fixed rate at 5.73% that was scheduled to mature on April 1, 2021. The refinance incurred fees of $7.9 million for a prepayment penalty to the lender that was factored into the fair value of debt as of the consolidation date. The refinance occurred in conjunction with the JPM Transaction in Note 3.
On November 1, 2019, the Company closed a new loan on Natick Mall for $505.0 million with a 5-year fixed interest rate at 3.72% which matures on November 1, 2024. This loan replaced the previous debt of $419.4 million with an interest rate of 4.60% that matured on November 1, 2019.
On November 1, 2019 the Company closed a new mortgage loan and a mezzanine loan at Park Meadows in amount of $615.0 million with an interest rate of 3.18% and in amount of $85.0 million with an interest rate of 6.25%, respectively. Both loans mature on November 1, 2024. These loans replaced previous debt of $360.0 million and an interest rate of 4.60% that was scheduled to mature on December 1, 2023. In connection with the refinancing, the Company incurred prepayment penalties of $35.6 million. As the refinancing plan was contemplated in connection with the acquisition, such fees were factored into the fair value of debt recognized on the consolidation date. The refinance occurred in conjunction with the JPM Transaction in Note 3.
On October 25, 2019, the Company closed a new loan on First Colony Mall for $220.0 million with a 10-year fixed interest rate at 3.55% which matures on November 1, 2029. This loan replaced the previous debt of $168.6 million with an interest rate of 4.50% that matured on November 1, 2019.
On September 6, 2019, the Company closed a new loan at Park City Center in the amount of $135.0 million with an interest rate of LIBOR plus 3.00% which matures on September 9, 2021. This loan replaced the previous debt of $172.2 million that matured June 6, 2019 and included a pay down of the existing mezzanine loan in the amount of $36.8 million. For the period between the maturity date of the previous debt and the effective date of the new loan, the company extended forbearance and paid forbearance fees in total amount of $0.5 million.
On August 26, 2019, the Company closed on new loans at 730 Fifth Avenue in the amount of $807.5 million which mature on September 1, 2024. The loans consist of a senior loan in amount of $587.3 million with a 5-year term at LIBOR plus 3.00%, a senior mezzanine loan in amount of $97.9 million with a 5-year term at LIBOR plus 4.25%, and a junior loan in amount of $122.3 million with a 5-year term at LIBOR plus 5.50%. The loans replaced the previous debt of $720.0 million that was previously extended to August 27, 2019 and included a pay down of $180.0 million on June 28, 2019.
On August 9, 2019, the Company closed on new debt at the SoNo Collection for $305.0 million. This debt is comprised of a $245.0 million mortgage loan and a $60.0 million mezzanine loan with respective interest rates of LIBOR plus 3.02% and LIBOR plus 6.75%. The loans mature on August 6, 2023.
On July 10, 2019, the Company closed a new loan on Westlake Center in the amount of $48.8 million with a 2-year floating rate loan at LIBOR plus 2.50% which matures on July 10, 2021. This loan replaced the previous debt of $42.5 million that matured July 10, 2019.
On July 5, 2019, the Company closed on new loans on The Woodlands Mall for a total of $465.0 million, which consists of $425.0 million with an interest rate of 4.25% and $40.0 million with an interest rate of 5.50%. The loan has a weighted average interest rate of 4.36% which matures on August 1, 2029. The loan replaced the previous debt of $294.0 million on the property that had a weighted average interest rate of 4.83% and scheduled to mature on June 10, 2023. In accordance with the previous debt agreement, the Company incurred a prepayment penalty of $27.5 million which is recorded as loss on extinguishment of debt on the Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2019
On July 1, 2019, the Company closed on a one-year extension on the loan at 830 North Michigan Ave in the amount of $78.0 million at LIBOR plus 1.60% which matures on July 1, 2020. This loan replaced the previous debt of $85.0 million that matured on July 1, 2019 and includes principal repayment of $7.0 million made in conjunction with the extension.
On June 3, 2019, the Company closed a new loan on the Grand Canal Shoppes in the amount of $975.0 million with a 10-year fixed interest rate of 4.29%, which matures on July 2, 2029. This loan replaced the previous debt of $625.0 million on the property that matured on June 3, 2019.
On May 1, 2019, the Company and BPR Cumulus LLC, BPR Nimbus LLC and GGSI Sellco LLC (each, an indirect subsidiary of the Company) issued $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes - Silver Bonds due 2026. The notes bear interest at an annual rate of 5.75% payable on May 15 and November 15 of each year, beginning on November 15, 2019 and will mature on May 15, 2026. During the last quarter of 2019, the Company made a principal payment in amount of $50.0 thousand.
On April 25, 2019, the Company obtained a one-year extension of a $1.3 billion loan secured by cross-collateralized mortgages on 15 properties with an interest rate of LIBOR plus 1.75% which matures on April 25, 2020. A principal repayment of $10.1
million was made in conjunction with the extension. The Company has one remaining one-year extension option to April 25, 2021 available.
On April 9, 2019, the Company closed a new loan on three properties included in the BPR-FF JV LLC joint venture that was formed with Brookfield Real Estate Partners during 2018 (Note 6). The three properties are Coronado Center, Governor's Square and Lynnhaven Mall. These properties were previously encumbered by $462.0 million of third-party debt which was replaced by a $515.0 million loan which is maturing May 1, 2024. The new loan consists of a senior loan in amount of $395.0 million with an interest rate at LIBOR plus 2.38%, and a mezzanine loan in amount of $120.0 million with an interest rate at LIBOR plus 6.75%. The new loan was recorded as an extinguishment of the previous loans and allocation of the new debt to the three properties.
As of December 31, 2020, we had $8.7 billion of debt pre-payable at our proportionate share without penalty. We may pursue opportunities to refinance this debt at lower interest rates and longer maturities.
As of December 31, 2020, our proportionate share of total debt aggregated $23.2 billion. Our total debt includes our consolidated debt of $16.3 billion and our share of Unconsolidated Real Estate Affiliates debt of $6.9 billion. Of our proportionate share of total debt, $6.9 billion is recourse to the Company or its subsidiaries (including the facility) due to guarantees or other security provisions for the benefit of the note holders.
The amount of debt due in the next three years represents 50.3% of our total debt at maturity. The maximum amount due in any one of the next ten years is no more than $4.2 billion at our proportionate share or approximately of 17.9% our total debt at maturity. Refer to Note 18 in the Consolidated Financial Statements for the scheduled payments for our consolidated share of total debt as of December 31, 2020, assuming that all maturity extensions are exercised. The $206.2 million of junior subordinated notes are due in 2036, but we may redeem them any time after April 30, 2011 (Note 6). As we do not expect to redeem the notes prior to maturity, they are included in the consolidated debt maturing subsequent to 2024.
We believe we will be able to extend the maturity date, repay under our available line of credit or refinance the consolidated debt that is scheduled to mature in 2021. We also believe that the joint ventures will be able to refinance the debt of our unconsolidated real estate affiliates upon maturity; however, there can be no assurance that we will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.
Acquisitions and Joint Venture Activity
From time-to-time we may acquire whole or partial interests in high-quality retail properties or make strategic dispositions. Refer to Note 3 for more information.
Reserves
With respect to our consolidated properties, for the years ended December 31, 2020 and 2019, we have recorded $42.3 million and $8.2 million respectively, associated with potentially uncollectible revenues, which includes $5.3 million and $0.1 million, respectively, for straight-line rent receivables. With respect to our Unconsolidated Real Estate Affiliates, for the years ended December 31, 2020 and 2019, our Unconsolidated Real Estate Affiliates have recorded $68.7 million and $11.3 million, respectively, associated with potentially uncollectible revenues, which includes $8.6 million and $0.2 million, respectively, for straight-line rent receivables. Of these amounts for the years ended December 31, 2020 and 2019, our share totaled $33.8 million and $6.0 million, respectively, which includes $4.2 million and $0.1 million, respectively, for straight-line rent receivables.
As of December 31, 2020, the Company, including consideration of our share of Unconsolidated Real Estate Affiliates, has collected approximately 75% of rents for the year then ended, and collections continue to increase subsequent to year end. While working to preserve our profitability and cash flow, we are also working with our tenants regarding requests for lease concessions and other forms of assistance. The Company continues to make meaningful progress in its negotiations with national and local tenants to secure rental payments, despite a significant portion of the Company’s tenants requesting rental assistance, whether in the form of deferral or rent reduction. As of December 31, 2020, in response to the COVID-19 pandemic, the Company granted rent deferrals and rent abatements of 4% and 5% of 2020 rents, respectively. The rent abatements granted were considered lease modifications and will be recognized prospectively over the remaining lease terms from the period of the rent that was abated. While we anticipate that we may grant further rent concessions, such as the deferral or abatement of lease payments, such rent concession requests are evaluated on a case-by-case basis. Not all requests for rent relief will be granted as the Company does not intend to forgo its legally enforceable contractual rights that exist under its lease agreements.
Developments and Redevelopments
We are currently redeveloping several consolidated and unconsolidated properties primarily to improve the productivity and value of the property, convert large-scale anchor boxes into smaller leasable areas and to create new in-line retail space and new restaurant venues. The execution of these redevelopment projects within our portfolio was identified as providing compelling risk-adjusted returns on investment.
We have development and redevelopment activities totaling approximately $449.0 million under construction and $327.0 million in the pipeline. We continue to evaluate a number of other redevelopment projects to further enhance the quality of our assets. The following table illustrates our planned redevelopments:
Stabilized
Year Proportionate Cost (1)
Property Location Description Total To-Date
Major Development Summary (in millions, at share unless otherwise noted)
Active redevelopments
Alderwood Lynnwood, WA Sears Redevelopment - Residential 2022 $ 13 $ 4
Stonestown Galleria San Francisco, CA Anchor Redevelopment for Retail and Entertainment 2023 149 106
Tysons Galleria McLean, VA Macy's Redevelopment for theater and multi level small shop expansion 2023 111 37
Other Projects Various 2021-2024 176 56
Active developments/redevelopments $ 449 $ 203
In planning
Oxmoor Center Louisville, KY Sears Redevelopment for Entertainment and Restaurants 2024 $ 30 $ 1
Cumberland Atlanta, GA Residential 2024 56 -
Northridge Northridge, CA Residential 2025 50 -
Ala Moana Honolulu, HI Residential Tower 2026 157 1
Other Projects Various 2021-2025 34 54
In planning $ 327 $ 56
Total retail developments $ 776 $ 259
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(1) Costs are at BPYU's ownership share post - August, 28, 2018, with closing of new joint venture partnerships.
Our investment in these projects for the year ended December 31, 2020 decreased compared to those in the year ended December 31, 2019 in conjunction with the applicable development plan and as projects near completion. The continued progression of redevelopment projects resulted in increases to BPYU’s investment to date. Prior to the COVID-19 pandemic, our current projects were generally progressing in accordance with their timeline and budget. The impact of the pandemic and associated restrictions that have been put in place by local governments may cause delays in construction and may impact our ability to progress pre-leasing efforts.
Capital Expenditures, Capitalized Interest and Overhead (at share)
The following table illustrates our capital expenditures, capitalized interest, and internal costs associated with leasing and development overhead, which primarily relate to ordinary capital projects at our operating properties. In addition, we incurred tenant allowances and capitalized leasing costs for our operating properties as outlined below. Capitalized interest is based upon qualified expenditures and interest rates; capitalized leasing and development costs are based upon time expended on these activities. These costs are amortized over lives which are consistent with the related asset.
Year Ended December 31,
2020 2019
(Dollars in thousands)
Operating capital expenditures (1) $ 112,511 $ 167,118
Tenant allowances and capitalized leasing costs (2) 83,631 200,302
Capitalized interest and capitalized overhead 21,568 22,585
Total $ 217,710 $ 390,005
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(1) Reflects only non-tenant operating capital expenditures.
(2) Tenant allowances paid on 3.9 million square feet for the year ended December 31, 2020 and 7.8 million for the year ended December 31, 2019.
Summary of Cash Flows
Cash Flows from Operating Activities
Net cash provided by operating activities was $(8.4) million for the year ended December 31, 2020, $428.1 million for the year ended December 31, 2019, and $584.5 million for the year ended December 31, 2018. Significant components of net cash provided by operating activities include:
2020 Activity
•equity in loss of Unconsolidated Real Estate Affiliates, $180.6 million;
•depreciation and amortization, $641.6 million;
•provision for impairment, $133.7 million; and
•accounts and notes receivable, net, $(310.4) million.
2019 Activity
•a decrease of cash inflows was primarily due to the joint ventures formed in conjunction with the BPY Transaction in the third quarter of 2018 (Note 3); and
•gain from change in control of investment properties and other, net of $(720.7) million.
2018 Activity
•gain from change in control of investment properties and other, net of $(3.1) billion.
Cash Flows from Investing Activities
Net cash (used in) provided by investing activities was $(252.8) million for the year ended December 31, 2020, $(1.3) billion for the year ended December 31, 2019, and $2.7 billion for the year ended December 31, 2018. Significant components of net cash (used in) provided by investing activities include:
2020 Activity
•development of real estate and property improvements, $(272.8) million;
•proceeds from sales of investments properties and unconsolidated real estate affiliates, $88.4 million; and
•contributions to unconsolidated real estate affiliates, $(141.4) million.
2019 Activity
•acquisition of real estate and property additions, $(877.1) million;
•loans to joint venture and joint venture partners, $(95.8) million;
•proceeds from sales of investment properties and Unconsolidated Real estate Affiliates, $185.2 million;
•development of real estate and property improvements, $(514.3) million;
•net proceeds from distributions received from Unconsolidated Real Estate Affiliates in excess of income, $363.2 million;
•contributions to Unconsolidated Real Estate Affiliates, $(239.4) million;
•proceeds from loan to affiliates, $330.0 million; and
•loans to affiliates, $(330.0) million.
2018 Activity
•proceeds from sale of investment properties and Unconsolidated Real Estate Affiliates, $3.1 billion;
•development of real estate and property improvements of $(674.5) million;
•net proceeds from distributions received from Unconsolidated Real Estate Affiliates in excess of income, $410.6 million;
•contributions to Unconsolidated Real Estate Affiliates, $(218.0) million; and
•proceeds from repayment of loans to joint ventures and joint venture partners, $204.9 million.
Cash Flows from Financing Activities
Net cash provided by (used in) financing activities was $354.4 million for the year ended December 31, 2020, $877.6 million for the year ended December 31, 2019, and $(3.2) billion for the year ended December 31, 2018. Significant components of net cash provided by (used in) financing activities include:
2020 Activity
•proceeds from the refinancing or issuance of mortgages, notes and loans payable, $906.4 million;
•principal payments on mortgages, notes, and loan payable, $(822.0) million;
•buyback of Class A Stock, $(168.4) million;
•issuances of Class B-1 Stock, $532.2 million;
•cash distributions to noncontrolling interests in consolidated real estate affiliates, $0.0 million; and
•cash distributions paid to stockholders, $(68.4) million.
2019 Activity
•proceeds from the refinancing or issuance of mortgages, notes and loans payable of $6.4 billion; which includes a $1.0 billion bond issuance;
•principal payments on mortgages, notes, and loan payable, $(4.5) billion;
•buyback of Class A Stock, $(114.9) million;
•buyback of Class B-1 stock, $(224.5) million;
•issuances of Class B-1 Stock, $293.3 million;
•cash distributions to noncontrolling interests in consolidated real estate affiliates, $(99.3) million; and
•cash distributions paid to common stockholders of $(790.2) million.
2018 Activity
•proceeds from refinancing or issuance of mortgages, notes and loans payable, $7.0 billion; net of principal payments of $(1.8) billion;
•issuances of Class C Stock, $200.0 million;
•cash contributions from noncontrolling interests in consolidated real estate affiliates, $1.5 billion;
•cash distributions paid to common stockholders, $(9.9) billion; and
•cash distributions and redemptions paid to holders of common units, $(107.1) million.
Critical Accounting Policies
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the consolidated financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Acquisitions of Operating Properties (Note 3)
Acquisitions of properties are typically accounted for as acquisitions of assets rather than acquisitions of a business. Accordingly, the results of operations of acquired properties have been included in the results of operations from the respective dates of acquisition and acquisition costs are capitalized. Estimates of future cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, buildings and improvements, equipment, assumed debt liabilities and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases, and tenant relationships.
The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value is allocated to land, where applicable, buildings, equipment and tenant improvements based on comparable sales and other relevant information with respect to the property. Specifically, the "if vacant" value of the buildings and equipment was calculated using a cost approach utilizing published guidelines for current replacement cost or actual construction costs for similar, recently developed properties; and an income approach. Assumptions used in the income approach to the value of buildings include: capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.
The estimated fair value of in-place tenant leases includes lease origination costs (the costs we would have incurred to lease the property to the current occupancy level of the property) and the lost revenues during the period necessary to lease-up from vacant to the current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, we evaluate the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of acquired in-place tenant leases is included in the balance of buildings and equipment and amortized over the remaining lease term for each tenant.
Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where we are either the lessor or the lessee. The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms significantly below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term. The above-market tenant leases are included in prepaid expenses and other assets (Note 14); the below-market tenant leases are included in accounts payable and accrued expenses (Note 15) in our Consolidated Balance Sheets.
Investments in Unconsolidated Real Estate Affiliates (Note 5)
We account for investments in joint ventures where we own a non-controlling joint interest using either the equity method or the cost method. If we have significant influence but not control over the investment, we utilize the equity method. If we have neither control nor significant influence, we utilize the cost method. Under the equity method, the cost of our investment is adjusted for our share of the earnings of such Unconsolidated Real Estate Affiliates from the date of acquisition, increased by our contributions and reduced by distributions received. Under the cost method, the cost of our investment is not adjusted for our share of the earnings of such Unconsolidated Real Estate Affiliates from the date of acquisition and distributions are treated as earnings when received.
To determine the method of accounting for partially owned joint ventures, we evaluate the characteristics of associated entities and determine whether an entity is a variable interest entity ("VIE"). A limited partnership or other similar entity is considered a VIE unless a simple majority of limited partners (excluding limited partners that are under common control with the general partner) have substantive kick-out rights or participating rights. If an entity is determined to be a VIE, we determine which party is the primary beneficiary by analyzing whether we have both the power to direct the entity's significant economic
activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the nature of the entity's operations, future cash flow projections, the entity's financing and capital structure, and contractual relationship and terms. Primary risks associated with our VIEs include the potential of funding the entities' debt obligations or making additional contributions to fund the entities' operations.
Partially owned, non-variable interest joint ventures over which we have controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned joint ventures where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
We continually analyze and assess reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management. Errors in the assessment of consolidation could result in material changes to our consolidated financial statements.
Revenue Recognition and Related Matters
Minimum rents are recognized on a straight-line basis over the terms of the related operating leases, including the effect of any free rent periods. Minimum rents also include lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as accretion related to above-market and below-market tenant leases on acquired properties and properties that were recorded at fair value at the emergence from bankruptcy.
In leasing tenant space, we may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, we determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If we are considered the owner of the leasehold improvements for accounting purposes, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.
Overage rent is paid by a tenant when the tenant's sales exceed an agreed upon minimum amount and is recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Tenant recoveries are most often established in the leases or in less frequent cases computed based upon a formula related to real estate taxes, insurance and other property operating expenses and are generally recognized as revenues in the period the related costs are incurred.
Accounting for real estate sales distinguishes between sales to a customer or non-customer for purposes of revenue recognition. Once we, as the seller, determine that we have a contract, we will identify each distinct non-financial asset promised to the counter-party and whether the counter-party obtains control and transfers risks and rewards of ownership of each non-financial asset to determine if we should derecognize the asset.
We provide an allowance for doubtful accounts against the portion of accounts receivable, net, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience.
Notes receivable are evaluated for impairment at least quarterly. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, we record an allowance through the provision for loan losses to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.
Leases
For operating leases with minimum scheduled rent increases, we recognize rental income on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments is probable. Variable lease payments are recognized as rental income in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Variable lease payments include overage rent, which is paid by a tenant when the tenant's sales exceed an agreed upon minimum amount, is recognized once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease.
Our leases also contain provisions for tenants to reimburse us for real estate taxes and insurance, as well as for other property operating expenses, marketing costs, and utilities, which are considered to be non-lease components. These tenant reimbursements are most often established in the leases or in less frequent cases computed based upon a formula. We have elected the practical expedient to not separate non-lease components from the lease component for all classes of underlying assets and determined that the lease component is the predominant component in the contract; therefore, these recoveries are recognized in a manner similar to minimum rents and variable rents within rental revenues on our Consolidated Statements of Operations and Comprehensive Income (Loss).
Rental revenues also includes lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as accretion related to above-market and below-market tenant leases on acquired properties and properties that were recorded at fair value at the emergence from bankruptcy.
Recognizing rental and related income on a straight-line basis results in a difference in the timing of revenue recognition from what is contractually due from tenants. Straight-line rents are recorded in accounts receivable, net in our Consolidated Balance Sheets. The Company is required to evaluate whether it is probable of collecting substantially all of the remaining lease payments. While we believe our leases generally contain provisions designed to ensure the creditworthiness of the tenant, companies in the retail industry, including some of our tenants, have declared bankruptcy, or from time to time, have voluntarily ceased their operations, downsized their brick and mortar presence or failed to comply with their contractual obligations to us and to others. While many of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are uncertain. We do evaluate the potential of bankruptcy and associated store closures when assessing whether the Company is probable of collecting substantially all of the remaining lease payments.
For leases where collectability of substantially all of the remaining lease payments is probable, we establish a general allowance for doubtful accounts against the portion of accounts receivable, net, including straight-line rents, which is estimated to be uncollectible due to credit-related losses based on our previous recovery experience. Lease concessions are generally considered a lease modification and thus are recognized prospectively over the remaining lease term when they become legally enforceable. However, the Company includes its estimate of potential lease concessions when establishing its general allowance, based on its best estimates of total lease concessions, recognizing the portion of the total concession that is deemed attributable to the current period through consideration of weighted average remaining lease terms. Changes in the general allowance are recognized in rental income on our Consolidated Statements of Operations and Comprehensive Income (Loss).
For leases where collectability of substantially all the remaining lease payments is not probable, the Company recognizes a current-period adjustment to rental income to the amount of cash collected from the lessee, effectively reducing cumulative income recognized since lease commencement from an accrual basis to cash basis. In addition, future revenue recognition is limited to amounts paid by the lessee. We will generally return to an accrual basis of accounting, if and when, all delinquent payments become current under the terms of the lease agreement and collectability of substantially all the remaining contractual lease payments is deemed probable.
In leasing tenant space, we may provide funding to the lessee through a tenant allowance. To account for a tenant allowance, we determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the control and ownership of such improvements. If we are considered the owner of the leasehold improvements, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the leasehold improvements, the allowance is capitalized to deferred expenses and considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.
Deferred expenses
The new leasing standard defines initial direct costs as incremental costs of a lease that would not have been incurred if the lease had not been obtained. These initial direct costs (consisting primarily of leasing commissions paid to third parties) are recognized as deferred expenses on our Consolidated Balance Sheet and are amortized using the straight-line method over the life of the leases. Other leasing costs which do not meet the definition of initial direct costs (consisting primarily of internal legal and leasing overhead costs) are expensed as incurred and included in property management and other costs in our Consolidated Statements of Operations and Comprehensive Income (Loss).
Topic 842 - Lease Modification Q&A
Due to the business disruptions and challenges severely affecting the global economy caused by the global economic shutdown, lessors may provide rent deferrals and other lease concessions to lessees. In April 2020, the Financial Accounting Standards Board ("FASB") staff issued a question and answer document (the "Lease Modification Q&A") focused on the application of lease accounting guidance to lease concessions provided as a result of the shutdown. Under existing lease guidance, economic relief that is agreed to or negotiated outside of the original lease agreement is typically considered a lease modification, in which case both the lessee and lessor would be required to apply the respective modification frameworks. However, if the lessee was entitled to the economic relief because of either contractual or legal rights, the relief would be accounted for outside of the modification framework. Although the original lease modification guidance in Accounting Standards Codification ("ASC") 842, Leases remain appropriate to address routine lease modifications, the Lease Modification Q&A established a different framework to account for certain lease concessions granted in response to the shutdown. The Lease Modification Q&A allows the Company, if certain criteria have been met, to make an accounting policy election to account for COVID-19 related lease concessions as either a lease modification or a negative variable adjustment to rental revenue. Such election is required to be applied consistently to leases with similar characteristics and similar circumstances.
The Company has elected to apply such relief and will avail itself of the election to treat lease concessions as lease modifications, thereby avoiding performing a lease by lease analysis for the lease concessions that were (1) granted as relief due to the shutdown and (2) result in the cash flows remaining substantially the same or less than the original contract.
Impairment
Operating properties
We regularly review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy percentage, debt maturities, changes in management's intent with respect to the properties and prevailing market conditions.
If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. The expected cash flows of a property are dependent on estimates and other factors subject to change, including (1) changes in the national, regional, global, and/or local economic climates, (2) competition from other shopping centers, stores, clubs, mailings, and the internet, (3) increases in operating costs and future required capital expenditures, (4) bankruptcy and/or other changes in the condition of third parties, including anchors and tenants, (5) expected holding period, (6) availability of and cost of financing, and (7) fair values including consideration of capitalization rates, discount rates, and comparable selling prices, and (8) the probability of obtaining concessions from creditors at properties for which the Company has suspended funding equity contributions to make contractual interest and/or principal payments. These factors could cause our expected future cash flows from a retail property to change, and, as a result, an impairment could be considered to have occurred.
Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property.
Although we may market a property for sale, there can be no assurance that the transaction will be complete until the sale is finalized. However, GAAP requires us to utilize the Company's expected holding period of our properties when assessing recoverability. If we cannot recover the carrying value of these properties within the planned holding period, we will estimate the fair values of the assets and record impairment charges for properties when the estimated fair value is less than their carrying value.
Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and construction in progress, are assessed by project and include, but are not limited to, significant changes in the Company's plans with respect to the project, significant changes in projected completion dates, tenant demand, anticipated revenues or cash flows, development costs, market factors and sustainability of development projects.
Impairment charges are recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the carrying value of a property is not recoverable and it exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and/or in the period of disposition.
Investment in Unconsolidated Real Estate Affiliates
A series of operating losses of an investee or other factors may indicate that an other-than-temporary decline in value of our investment in an Unconsolidated Real Estate Affiliate has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we performed for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary declines with respect to the carrying values of our Unconsolidated Real Estate Affiliates.
General
A significant judgement is made as to if and when impairment should be taken. The Company's assessment of impairment as of December 31, 2020 was based on the most current information available to the Company. Impairment charges could be taken in the future if economic conditions change or if the plans regarding our assets change. Therefore, we can provide no assurance that material impairment charges with respect to our assets, including operating properties, construction in progress and investments in Unconsolidated Real Estate Affiliates, will not occur in future periods. We will continue to monitor circumstances and events in future periods to determine whether impairments are warranted. Based upon current market conditions, certain of the Company’s properties may have fair values less than their carrying amounts. However, based on the Company’s plans with respect to those properties, the Company believes that their carrying amounts are recoverable and therefore, under applicable GAAP guidance, no impairment charges were recognized. If the operating conditions mentioned above deteriorate or if the Company’s expected holding period for assets change, subsequent tests for impairment could result in impairment charges in the future.
Capitalization of Development Costs
Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. During development, we typically obtain land or land options, zoning and regulatory approvals, anchor commitments, and financing arrangements. This process may take several years during which we may incur significant costs. We capitalize all development costs once it is considered probable that a project will reach a successful conclusion. In the event a development is no longer deemed to be probable of occurring, the capitalized costs are expensed. Determination of when a development project is substantially complete and held available for occupancy and capitalization must cease also involves a degree of judgment. Real estate taxes, interest costs, and internal costs associated with leasing and development overhead incurred during construction periods are capitalized.
Contractual Cash Obligations and Commitments
The following table aggregates our subsequent contractual cash obligations and commitments as of December 31, 2020:
2021 2022 2023 2024 2025 Subsequent/
Other Total
(Dollars in thousands)
Long-term debt-principal (1) $ 3,580,941 $ 2,715,234 $ 2,142,753 $ 2,371,510 $ 3,103,457 $ 2,489,014 $ 16,402,909
Interest payments (2) 536,017 443,633 365,290 288,992 171,224 78,169 1,883,325
Retained debt-principal 56,975 - - - - - 56,975
Ground lease payments 2,008 2,055 2,128 2,164 2,202 137,915 148,472
Corporate leases 7,649 7,649 7,840 8,036 8,237 17,097 56,508
Purchase obligations (3) 275,507 - - - - - 275,507
Junior Subordinated Notes (4) - - - - - 206,200 206,200
Total $ 4,459,097 $ 3,168,571 $ 2,518,011 $ 2,670,702 $ 3,285,120 $ 2,928,395 $ 19,029,896
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(1) Excludes $3.2 million of non-cash debt market rate adjustments, $105.9 million of deferred financing costs, and $11.0 million of debt related to solar projects.
(2) Based on rates as of December 31, 2020. Variable rates are based on a LIBOR rate of 2.0%. Excludes interest payments related to debt market rate adjustments.
(3) Reflects accrued and incurred construction costs payable. Routine trade payables have been excluded.
(4) The $206.2 million of junior subordinated notes are due in 2036, but may be redeemed by us any time. As we do not expect to redeem the notes prior to maturity, they are included in consolidated debt maturing subsequent to 2025.
Other long-term liabilities related to ongoing real estate taxes have not been included in the table as such amounts depend upon future applicable real estate tax rates. Real estate tax expense was $192.7 million in 2020, $171.1 million in 2019 and $221.2 million in 2018.
In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties (reference is made to Item 3 above, which description is incorporated into this response).
We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. The following is a summary of our contractual rental expense, which is included in other property operating costs in our Consolidated Statements of Operations and Comprehensive Income (Loss):
Year Ended December 31,
2020 2019 2018
(Dollars in thousands)
Contractual rent expense, including participation rent $ 17,394 $ 12,979 $ 7,105
Contractual rent expense, including participation rent and excluding amortization of above and below-market ground leases and straight-line rent 13,011 12,979 5,083
REIT Requirements
In order to remain qualified as a REIT for Federal income tax purposes, we must distribute at least 90% of our taxable ordinary income to stockholders. We are also subject to federal income tax to the extent we distribute less than 100% of our REIT taxable income, including capital gains. See Note 8 to the Consolidated Financial Statements for more detail on our ability to remain qualified as a REIT.
Recently Issued Accounting Pronouncements
Refer to Note 2 of the Consolidated Financial Statements for recently issued accounting pronouncements.
Subsequent Events
Refer to Note 19 of the Consolidated Financial Statements for subsequent events.
Non-GAAP Supplemental Financial Measure and Definition
Funds From Operations ("FFO")
The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts ("Nareit"). The Company determines FFO to be its share of consolidated net income (loss) attributable to common stockholders and redeemable non-controlling common unit holders computed in accordance with GAAP, adjusted for real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon the Company’s economic ownership interest, and all determined on a consistent basis in accordance with GAAP.
The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company’s properties between periods because it does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company’s operating performance.
We calculate FFO in accordance with standards established by Nareit, which may not be comparable to measures calculated by other companies who do not use the Nareit definition of FFO or do not calculate FFO in accordance with Nareit guidance. In addition, although FFO is a useful measure when comparing our results to other REITs, it may not be helpful to investors when comparing us to non-REITs.
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measures
In order to provide a better understanding of the relationship between the Company’s non-GAAP financial measure of FFO, a reconciliation of GAAP net income attributable to BPYU to FFO has been provided. The Company’s non-GAAP financial measure does not represent cash flow from operating activities in accordance with GAAP and should not be considered as an alternative to GAAP net income (loss) attributable to BPYU and is not necessarily indicative of cash flow. In addition, the Company has presented the financial measure on a consolidated and unconsolidated basis (at the Company’s proportionate share) as the Company believes that given the significance of the Company’s operations that are owned through investments accounted for by the equity method of accounting, the detail of the operations of the Company’s unconsolidated properties provides important insights into the income and FFO produced by such investments.
The following table reconciles GAAP net income attributable to BPYU to FFO for the years ended December 31, 2020 and 2019:
Year Ended December 31,
2020 2019
Net Income Attributable to BPYU $ (711,461) $ 432,880
Provision for impairment excluded from FFO - Consolidated Properties 133,671 223,287
Provision for impairment excluded from FFO - Unconsolidated Properties 65,968 -
Gain from changes in control of investment properties and other 15,433 (720,706)
Unconsolidated Real Estate Affiliates - gain (loss) on investment 61,379 (206,790)
Gain on sales of investment properties (13,402) (14,414)
Preferred stock dividends (15,938) (15,937)
Above and below market ground rent 4,383 -
Depreciation and amortization of capitalized real estate costs - Consolidated Properties 622,435 482,531
Depreciation and amortization of capitalized real estate costs - Unconsolidated Properties 456,073 531,323
Allocation of noncontrolling interests (1) (134,350) (37,961)
FFO 484,191 674,213
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(1) Noncontrolling interest holders' share of adjustments including depreciation, impairment, gain from changes in control of investment properties and other, Unconsolidated Real Estate Affiliates - gain on investment and gain on sales of investment properties.
Forward-Looking Statements
Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that do not relate to historical or current facts or matters are forward-looking statements. When used, the words “may," "will," "seek," "expects," "anticipates," "believes," "targets," "intends," "should," "estimates," "could," "continue," "assume," "projects," "plans," or similar expressions, are intended to identify forward-looking statements. Although we believe the expectations reflected in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Accordingly, investors should use caution in relying on forward-looking statements.
Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to:
•the market price of BPY units and the combined business performance of BPY as a whole;
•general volatility of conditions affecting the retail sector;
•the effects of the COVID-19 pandemic and the possibility of future outbreaks of highly infectious or contagious diseases;
•our inability to acquire and maintain tenants or to lease space on terms favorable to us;
•risks related to the bankruptcy or store closures of national tenants with chains of stores in many of our properties;
•our inability to sell real estate quickly;
•risks related to perceptions by retailers and shoppers of the convenience and attractiveness of our retail properties;
•risks related to the development, expansion and acquisitions of properties;
•risks related to competition in our business;
•risks related to natural disasters, pandemics/epidemics or terrorist attacks;
•risks related to cyber and data security breaches or information technology failures;
•environmental uncertainties and related costs, including costs resulting from uninsured potential losses;
•general risks related to inflation or deflation;
•discontinuation of LIBOR;
•risks relating to impairment charges for our real estate assets;
•risks related to conflicts of interest with BPY and our status as a "controlled company" within the meaning of the rules of Nasdaq;
•our dependence on our subsidiaries for cash;
•risks related to our joint venture partners, including risks related to conflicts of interests, potential bankruptcies, tax-related obligations and financial support relating to such joint venture partners;
•our inability to maintain status as a REIT, and possible adverse changes to tax laws;
•risks related to our indebtedness and debt restrictions and covenants;
•our inability to refinance, extend, restructure or repay near and indeterminate debt;
•our inability to raise capital through financing activities or asset sales; and
•risks related to the structure and trading of the Class A Shares.
We discuss these and other risks and uncertainties in our Annual Report and our quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. As of December 31, 2020, we had consolidated debt of $16.1 billion, including $7.5 billion of variable-rate debt. A 25 basis point movement in the interest rate on the $7.5 billion of variable-rate debt would result in a $18.8 million annualized increase or decrease in consolidated interest expense and operating cash flows.
In addition, we are subject to interest rate exposure as a result of variable-rate debt collateralized by the Unconsolidated Properties. Our share (based on our respective equity ownership interests in the Unconsolidated Real Estate Affiliates) of such variable-rate debt was $0.7 billion at December 31, 2020. A similar 25 basis point annualized movement in the interest rate on the variable-rate debt of the Unconsolidated Real Estate Affiliates would result in a $1.9 million annualized increase or decrease in our equity in the income of Unconsolidated Real Estate Affiliates.
In July 2017, the FCA announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified the SOFR as its preferred alternative to USD-LIBOR. The Company is not able to predict when LIBOR will cease to be published or precisely how SOFR will be calculated and published. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.
The Company has contracts that are indexed to LIBOR and is monitoring and evaluating the related risks, which include interest amounts on our variable rate debt and the swap rate for our interest rate swaps as discussed in Note 6 - Mortgages, Notes and Loans Payable. In the event that LIBOR is discontinued, the interest rates will be based on a fallback reference rate specified in the applicable documentation governing such debt or swaps or as otherwise agreed upon. Such an event would not affect the Company’s ability to borrow or maintain already outstanding borrowings or swaps, but the alternative reference rate could be higher and more volatile than LIBOR.
Certain risks arise in connection with transitioning contracts to an alternative reference rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require substantial negotiation with each respective counterparty.
If a contract is not transitioned to an alternative reference rate and LIBOR is discontinued, the impact is likely to vary by contract. If LIBOR is discontinued or if the method of calculating LIBOR changes from its current form, interest rates on our current or future indebtedness may be adversely affected.
While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.
For additional information concerning our debt, and management's estimation process to arrive at a fair value of our debt as required by GAAP, reference is made to Item 7, Management's Discussion and Analysis, Liquidity and Capital Resources and Notes 4 and 6. At December 31, 2020, the fair value of our consolidated debt has been estimated for this purpose to be $24.8 million higher than the carrying amount of $16.1 billion.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Consolidated Financial Statements and Consolidated Financial Statement Schedule beginning on page for the required information.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the persons performing the functions of principal executive and principal financial officers for us pursuant to the Master Services Agreement, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act). Based on that evaluation, the persons performing the functions of principal executive and principal financial officers for us pursuant to the Master Services Agreement have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of persons performing the functions of principal executive and principal financial officers for us pursuant to the Master Services Agreement to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
As of December 31, 2020, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in "Internal Control-Integrated Framework (2013)." Based on this assessment, management believes that, as of December 31, 2020, the Company maintained effective internal controls over financial reporting. Deloitte & Touche LLP, the independent registered public accounting firm who audited our consolidated financial statements contained in this Form 10-K, has issued a report on our internal control over financial reporting, which is included herein.
There were no changes in internal control over financial reporting during the year ended December 31, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any
material impact to our internal control over financial reporting due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Brookfield Property REIT Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Brookfield Property REIT Inc. and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and consolidated financial statement schedule as of and for the year ended December 31, 2020, of the Company and our report dated February 26, 2021, expressed an unqualified opinion on those consolidated financial statement schedule.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 26, 2021

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
Not applicable.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information about our Directors
Our current board of directors (“Board”) is as follows:
Name Age Position Director Since
Caroline Atkinson 68 Director 2019
Jeffrey M. Blidner 72 Director 2018
Soon Young Chang 61 Director 2018
Omar Carneiro da Cunha 74 Director 2018
Stephen DeNardo 67 Director 2018
Louis J. Maroun 70 Director 2018
A. Douglas McGregor 64 Director 2020
Lars Rodert 59 Lead Independent Director and Director 2018
Michael J. Warren 53 Director 2020
Set forth below is biographical information for our current directors. All of our directors are also directors of the general partner of our parent company, BPY (the "BPY General Partner").
Caroline Atkinson. Ms. Atkinson is a Senior Adviser to Rock Creek investment firm in Washington D.C. and a trustee of the International Institute of Strategic Studies in London. Ms. Atkinson is an Oxford-trained economist with more than two decades of experience working as a senior policymaker in international economics and finance and as an executive in technology. She has held senior positions at Google Inc. (“Google”), the U.S. government, The International Monetary Fund and The Bank of England. Most recently, Ms. Atkinson was the Head of Global Policy for Google. Prior to joining Google, Ms. Atkinson worked for President Barack Obama as the Deputy National Security Adviser for International Economics at the White House. She was the President’s personal representative to major international economic summits, including the G-7/8 and the G-20. She was also the Advisor to Treasury Secretaries, Robert Rubin and Lawrence Summers. She has advised leading U.S. companies on global business and economic issues. Ms. Atkinson is a Member of the Board Executive Committee for the Peterson Institute for International Economics, and a Member of Council on Foreign Relations and the Economic Club of New York. The Board nominated Ms. Atkinson to serve as a director based, among other factors, on her experience in international economics and finance.
Jeffrey M. Blidner. Mr. Blidner is Vice Chairman of Brookfield Asset Management. Mr. Blidner is also Chief Executive Officer of Brookfield’s Private Funds Group, Chairman and a director of Brookfield Business Partners L.P. and Brookfield Renewable Partners L.P. and a director of Brookfield Asset Management and Brookfield Infrastructure Partners L.P. Prior to joining Brookfield in 2000, Mr. Blidner was a senior partner at a Canadian law firm. The Board nominated Mr. Blidner to serve as a director based, among other factors, on his knowledge of the Company and his experience in board governance.
Soon Young Chang. Dr. Chang is a member of the board of directors of Dubai World. Dr. Chang serves as Senior Advisor to the Investment Corporation of Dubai, providing strategic counsel and lending his global perspective to the investment arm of the Dubai Government. Dr. Chang is the founder and chairman of Midas International Asset Management Company, an international asset management fund which manages over $5 billion. He is also a founding partner of Sentinel Advisor, a New York-based arbitrage fund. Dr. Chang has served as an advisor to a variety of financial institutions, including Korea National Pension Corporation, Hyundai International Merchant Bank and Templeton-Ssangyong Investment Trust Company. Dr. Chang received his Master’s and Doctoral degrees from the George Washington University in the United States and has authored many books and articles on the subject of financial engineering. The Board nominated Dr. Chang to serve as a director based, among other factors, on his knowledge of the Company and his experience in asset management and international finance.
Omar Carneiro da Cunha. Mr. Cunha is a Senior Partner with Dealmaker Ltd., a consultancy and M&A advisory firm, with a focus in telecommunications, information technology, oil & gas and retail, and has also been a Senior Partner of BOND Consultoria Empresarial e Participacoes since 1994. He is also a director of Petroleo Brasileiro S/A (Petrobras), Chairman of the Audit Committee and member of the Investment Committee since 2020. He was the Chairman of “Bob’s”, a Brazilian fast-food company, from 1995 to 2008, a director of the Energisa Group since 1996, and a director of Grupo Libra from 2010 to 2019. In 2005, Mr. Cunha was the Deputy Chairman and Chief Executive Officer of VARIG Brazilian Airline. From 1995 to
1998, Mr. Cunha was the President of AT&T Brasil and a member of the Management Committee of AT&T International. Prior to that, Mr. Cunha worked for 27 years in Brazil and abroad for the Royal Dutch/Shell Group, and was President of Shell Brasil, Billiton Metals and Shell Quimica from 1991 to 1994. Mr. Cunha is currently a member of the board of the American Chamber of Commerce for Brazil. The Board nominated Mr. Cunha to serve as a director based, among other factors, on his knowledge of the Company and his experience in board governance in the telecommunications, technology, energy and retail sectors.
Stephen DeNardo. Mr. DeNardo is currently managing director and president and Chief Executive Officer of RiverOak Investment Corp., LLC and has held this position since 1999. From 1997 to 1999 he was Partner and Senior Vice President of ING Realty Partners, where he managed a $1 billion portfolio. Prior to his employment with ING Realty Partners, he was President of ARES Realty Capital from 1991 to 1997, where he managed a $5 billion portfolio of diversified debt and equity assets. Before joining ARES Realty Capital, he was a Partner at First Winthrop Corporation. Mr. DeNardo has held a license as a Certified Public Accountant since 1978 and is a Chartered Global Management Accountant. He also has a B.S. in Accounting from Fairleigh Dickinson University. The Board nominated Mr. DeNardo to serve as a director based, among other factors, on his knowledge of the Company, his financial acumen and his experience in commercial real estate and asset management.
Louis Joseph Maroun. Mr. Maroun is the Founder and Chairman of Sigma Real Estate Advisors and Sigma Capital Corporation, which specializes in international real estate advisory services. Prior to this role, Mr. Maroun was the Executive Chairman of ING Real Estate Canada and held executive positions in a number of real estate companies where he was responsible for overseeing operations, real estate transactions, asset and property management, as well as many other related functions. Mr. Maroun also is on the board of directors of Brookfield Renewable Energy Partners L.P., and Summit Industrial Income REIT. Mr. Maroun graduated from the University of New Brunswick in 1972 with a Bachelor’s degree, followed by a series of post graduate studies and in January of 2007, after a long and successful career in investment real estate, Mr. Maroun was elected to the position of Fellow of the Royal Institute of Chartered Surveyors. The Board nominated Mr. Maroun to serve as a director based, among other factors, on his knowledge of the Company and his experience in commercial real estate and board governance.
A. Douglas McGregor. Mr. McGregor was the Group Head of RBC Capital Markets and RBC Investor & Treasury Services, Chairman and Chief Executive Officer of RBC Capital Markets, and was a member of RBC’s Group Executive until his retirement in January 2020. He is also a director of the BPY General Partner. Mr. McGregor joined RBC in 1983 and held progressively senior roles at the bank, becoming Capital Markets Chief Executive Officer in 2008 and assuming responsibility for Investor & Treasury Services in 2012. As Chairman and Chief Executive Officer of RBC Capital Markets, Mr. McGregor had global oversight of the firm’s Corporate & Investment Banking and Global Markets activities conducted by its approximately 7,500 employees worldwide. He also directly led the investment bank’s real estate lending businesses. As Group Head of RBC Investor & Treasury Services, Mr. McGregor was responsible for this business’ custody, treasury and financing services for institutional clients globally. Mr. McGregor is also Chairman and member of the Audit Committee of Plaza Retail REIT. Mr. McGregor holds an Honours B.A. (Business) and an MBA from the University of Western Ontario. Mr. McGregor serves on the University Health Network’s Board of Trustees in Toronto and is a former Chairman of the Board of Directors of the Investment Industry Regulatory Organization of Canada. The Board nominated Mr. McGregor to serve as a director based, among other factors, on his experience in commercial real estate, asset management and international finance.
Lars Rodert. Mr. Rodert is the founder and Chief Executive Officer of ÖstVäst Advisory (“OVA”). Mr. Rodert has 30 years of experience in the global investment industry. Prior to OVA, Mr. Rodert spent 11 years as a Global Investment Manager for IKEA Treasury. Before joining IKEA, Mr. Rodert was with SEB Asset Management for 10 years as Chief Investment Officer and responsible for SEB Global Funds. Prior to SEB, Mr. Rodert spent 10 years in North America with five years at Investment Bank Gordon Capital and five years as a partner with a private investment holding company, Robur et. Securitas. Mr. Rodert is a director of PCCW Limited, an information and communications technology company. Mr. Rodert holds a Master of Science Degree in Business and Economics from Stockholm University. The Board nominated Mr. Rodert to serve as a director based, among other factors, on his knowledge of the Company and his experience in commercial real estate and board governance.
Michael J. Warren. Mr. Warren is the Managing Director of Albright Stonebridge Group (“ASG”). Mr. Warren served as ASG’s Managing Principal from 2013 to 2017 and as Principal from 2009 to 2013. Prior to ASG, Mr. Warren served as the Chief Operating Officer and Chief Financial Officer of Stonebridge International from 2004 to 2009, where he managed operations, business development, finance, and personnel portfolios. Mr. Warren served in various capacities in the Obama Administration, including as senior advisor in the White House Presidential Personnel Office and as co-lead for the Treasury and Federal Reserve agency review teams of the Obama-Biden Presidential Transition. Mr. Warren serves on the board of trustees and the risk & audit committees at Commonfund, the board of directors of Walker & Dunlop, Inc. and the board of directors of MAXIMUS. He serves as a trustee of Yale University and is a member of the Yale Corporation Investment Committee. Mr. Warren formerly served as a trustee of the District of Columbia Retirement Board and as a member of the board of directors of the United States Overseas Private Investment Corporation. Mr. Warren received degrees from Yale
University and Oxford University where he was a Rhodes Scholar. The Board nominated Mr. Warren to serve as a director based, among other factors, on his experience in business development and finance.
Information about our Executive Officers
Our service providers ("Service Providers"), wholly owned subsidiaries of Brookfield Asset Management, provide management services to us pursuant to our Master Services Agreement. Brian W. Kingston and Bryan K. Davis in their roles at the Service Providers perform similar functions for BPYU as would typically be performed by a principal executive officer and principal financial officer, respectively. These individuals are as follows:
Name Age Position with One of the Service Providers Since
Brian W. Kingston 47 Chief Executive Officer 2015
Bryan K. Davis 47 Chief Financial Officer 2015
Brian W. Kingston. Mr. Kingston was named Chief Executive Officer in 2015. He is also a Managing Partner at Brookfield Asset Management and Chief Executive Officer of Brookfield Property Group. Mr. Kingston joined Brookfield in 2001 and has been engaged in a wide range of merger and acquisition activities. From 2008 to 2013 he led Brookfield’s Australian business activities, holding the positions of Chief Executive Officer of Brookfield Office Properties Australia, Chief Executive Officer of Prime Infrastructure and Chief Financial Officer of Multiplex.
Bryan K. Davis. Mr. Davis was named Chief Financial Officer in 2015. He is also a Managing Partner at Brookfield Asset Management. Prior to that, he was Chief Financial Officer of Brookfield’s global office property company for eight years and spent five years in senior finance roles. Mr. Davis also held various senior finance positions including Chief Financial Officer of Trilon Financial Corporation, Brookfield Asset Management’s financial services subsidiary. Prior to joining Brookfield Asset Management in 1999, Mr. Davis was involved in providing restructuring and advisory services at Deloitte & Touche LLP. He is a Chartered Accountant and holds a Bachelor of Commerce degree from Queen’s University.
Corporate Governance
Code of Business Conduct and Ethics
The Board has adopted the Code of Business Conduct and Ethics (“Code of Conduct”) of Brookfield Asset Management, which is applicable to all directors, officers, employees and temporary workers of Brookfield Asset Management, its wholly owned subsidiaries and certain publicly traded controlled affiliates who have not adopted their own Code of Conduct, including the Company. Our Code of Conduct is available on our website at bpy.brookfield.com/bpyu under the “Corporate Governance-Governance Documents” heading. In addition, a copy may be obtained by writing to our Secretary at our principal executive offices. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct by posting such information on the Company’s website.
Changes to Nomination Procedures for Use by Security Holders
There were no material changes to the procedures by which stockholders may recommend nominees to the Board during the fiscal year ended December 31, 2020.
Board Committees
Audit Committee
The Board has a standing Audit Committee, established in accordance with the requirements of the SEC. The members of the Audit Committee are Stephen DeNardo (Chairman), Louis J. Maroun and Lars Rodert. The Board has affirmatively determined that all of the members of the Audit Committee meet the requirements for independence and expertise, including financial literacy for the purposes of serving on the Audit Committee, under applicable Nasdaq Stock Market (“Nasdaq”) listing standards and SEC rules. The Board has also determined that Mr. DeNardo qualifies as an “audit committee financial expert” under applicable SEC rules.
The Audit Committee is responsible for assisting and advising the Board with respect to: our accounting and financial reporting processes; the integrity and audits of our financial statements; our compliance with legal and regulatory requirements; and the qualifications, performance and independence of our independent accountants. The Audit Committee is responsible for engaging our independent auditors, reviewing the plans and results of each audit engagement with our independent auditors,
approving professional services provided by our independent accountants, considering the range of audit and non-audit fees charged by our independent auditors and reviewing the adequacy of our internal accounting controls.
Delinquent Section 16 Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of a registered class of our equity securities to file reports with the SEC regarding their ownership and changes in ownership of such registered equity securities. Based on our review of the copies of all Section 16(a) forms received by us and other information, we believe that with regard to the fiscal year ended December 31, 2020, all of our executive officers, directors and greater than 10% stockholders complied with all applicable filing requirements.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Company does not directly employ any of the persons responsible for managing its business. Under our Master Services Agreement, our Service Providers provide, or arrange for other service providers to provide, day-to-day management and administrative services for our Company. Please see “Certain Relationships and Related Transactions, and Director Independence -Related Party Transactions-Master Services Agreement” below for further detail on our Master Services Agreement.
Messrs. Kingston and Davis in their roles at the Service Providers perform similar functions for BPYU as would typically be performed by a principal executive officer and principal financial officer, respectively. BPYU does not directly or indirectly compensate Messrs. Kingston and Davis or grant them any equity awards. BPYU does not reimburse the Service Providers for their compensation. The compensation of Messrs. Kingston and Davis is set by the Service Providers and we have no control over the determination of their compensation. Messrs. Kingston and Davis participate in employee benefit plans and arrangements sponsored by the Service Providers. We have not established any employee benefit plans or entered into any employment agreements with them.
Compensation of Directors
Directors receive an annual retainer of $15,000 for their service on the Board and reimbursement of expenses incurred in attending meetings. Directors also receive an annual retainer of $125,000 for serving on the board of directors and various committees of the BPY General Partner. The BPY General Partner pays the chair of its audit committee an additional $20,000 per year and pays the other members of its audit committee an additional $10,000 per year for serving in such positions. The BPY General Partner also pays its Chairman an additional $50,000 per year and its lead independent director an additional $10,000 per year. Directors who are not independent due to their employment with Brookfield Asset Management receive no fees for their services on the Board. The Governance and Nominating Committee periodically reviews Board compensation in relation to its peers and other similarly sized companies and is responsible for approving changes in compensation for non-employee directors.
2020 Director Compensation
The following table sets forth the compensation earned by or paid to each of our non-employee directors in 2020. Mr. Warren was appointed to the Board in November 2020 and did not receive any compensation during 2020.
Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1)
All Other Compensation ($) Total ($)
Richard B. Clark $ - $ - $ - $ -
Caroline M. Atkinson 15,000 - - 15,000
Jeffrey M. Blidner - - - -
Soon Young Chang 15,000 - - 15,000
Omar Carneiro da Cunha 15,000 - - 15,000
Scott R. Cutler 15,000 - - 15,000
Stephen DeNardo 15,000 - - 15,000
Louis J. Maroun 15,000 - - 15,000
Lars Rodert 15,000 - - 15,000
Michael J. Warren - - - -
1.None of the directors held BPYU stock options or unvested stock awards as of December 31, 2020.
Compensation Committee Interlocks and Insider Participation
While certain of our subsidiaries have employees, BPYU does not have any employees. Under our Master Services Agreement, our Service Providers provide, or arrange for other service providers to provide, day-to-day management and administrative services for our Company. As a result, we do not directly pay employee or management compensation and do not require a compensation committee. Our directors participate in the consideration of director compensation.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding beneficial ownership of each class of our capital stock by certain persons as of December 31, 2020. In the case of persons other than Messrs. Kingston and Davis, our directors and Brookfield Asset Management, or where we have received additional information from the beneficial owner, the information presented in this table is based upon the most recent filings with the SEC.
The table lists the applicable percentage ownership based on 39,127,335 shares of Class A Stock, 202,438,184 shares of Series B Preferred Stock, 196,886,256 shares of Class B-1 Stock, 121,203,654 shares of Class B-2 stock, par value $0.01 per share (“Class B-2 Stock”), 640,051,301 shares of Class C Stock and 10,000,000 shares of 6.375% Series A Cumulative Perpetual Redeemable Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”) outstanding as of December 31, 2020.
The table below sets forth such estimated beneficial ownership for: each stockholder that is known to us to be a beneficial owner of more than 5% of the Company’s outstanding shares of each class of our capital stock (“Principal Stockholders”); each director; Messrs. Kingston and Davis; and all directors and Messrs. Kingston and Davis as a group.
Class A Stock Series B Preferred Stock Class B-1 Stock Class B-2 Stock Class C Stock Class A Preferred Stock
Name of Beneficial Owner # Shares Beneficially Owned % of Class # Shares Beneficially Owned % of Class # Shares Beneficially Owned % of Class # Shares Beneficially Owned % of Class # Shares Beneficially Owned % of Class # Shares Beneficially Owned % of Class
Principal Stockholders
Blackrock, Inc. (1) 4,193,676 11 % - - - - - - - - - -
BPY 3,036,315 8 % 202,438,184 100 % 196,886,256 100 % 121,203,654 100 % 640,051,301 100 % - -
Persons and entities associated with Farallon Capital Management LLC (2) 8,054,215 21 % - - - - - - - - - -
The Vanguard Group (3) 2,790,454 7 % - - - - - - - - - -
Brookfield Asset Management (4) 3,036,315 8 % - - - - - - - - - -
Global X Management Company LLC ("GXMC") (5) 2,524,254 6 %
Named Executive Officers (6):
Brian W. Kingston 235,000 1 % - - - - - - - - - -
Bryan K. Davis 100,000 - % - - - - - - - - - -
Directors (6): - - % - - - - - - - - - -
Caroline M. Atkinson - - % - - - - - - - - - -
Jeffrey M. Blidner - - % - - - - - - - - - -
Soon Young Chang - - % - - - - - - - - - -
Omar Carneiro da Cunha - - % - - - - - - - - - -
Stephen DeNardo - - % - - - - - - - - - -
Louis J. Maroun - - % - - - - - - - - - -
A. Douglas McGregor - - % - - - - - - - - - -
Lars Rodert - - % - - - - - - - - - -
Michael J. Warren - - % - - - - - - - - - -
All directors and executive officers as a group (11 persons) 335,000 1 %
•Represents beneficial ownership of less than 1%.
1.Information regarding BlackRock, Inc. (“BlackRock”) is based solely on a Schedule 13G/A filed by BlackRock with the SEC on July 10, 2019. BlackRock’s address is 55 East 52nd Street, New York, NY 10055. The Schedule 13G/A indicates that BlackRock has sole voting power with respect to 3,827,792 shares of Class A Stock and sole dispositive power with respect to 4,193,676 shares of Class A Stock.
2.Information regarding Farallon Capital Management, LLC (“Farallon”) is based solely on a Schedule 13G filed by Farallon with the SEC on September 7, 2018 on behalf of Farallon and the following associated persons and entities: Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Four Crossings Institutional Partners V, L.P. and Farallon Capital (AM) Investors L.P., Farallon Partners, L.L.C., Farallon Institutional (GP) V, L.L.C., Philip D. Dreyfuss, Michael B. Fisch, Richard B. Fried, David T. Kim, Monica R. Landry, Michael G. Linn, Rajiv A. Patel, Thomas G. Roberts, Jr., William Seybold, Andrew J. M. Spokes, John R. Warren and Mark C. Wehrly (collectively, the “Farallon Reporting Persons”). The address of the Farallon Reporting Persons is c/o Farallon Capital Management, L.L.C., One Maritime Plaza, Suite 2100, San Francisco, CA 94111. The Schedule 13G indicates that, collectively, the Farallon Reporting Persons have shared voting and dispositive power over 8,054,215 shares of Class A Stock.
3.Information regarding The Vanguard Group (“Vanguard”) is based solely on a Schedule 13G/A filed by Vanguard with the SEC on February 8, 2021. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates that Vanguard has sole voting power with respect to 0 shares of Class A Stock, shared voting power with respect to 105,875 shares of Class A Stock, sole dispositive power with respect to 2,620,059 shares of Class A Stock and shared dispositive power with respect to 170,395 shares of Class A Stock.
4.Information regarding Brookfield Asset Management is based on a Schedule 13G filed by Brookfield Asset Management with the SEC on February 8, 2021 on behalf of Brookfield Asset Management and the following associated entities: BUSC Finance LLC (“BUSC Finance”), Brookfield US Inc. (“BUSI”), Brookfield US Holdings Inc. (“BUSHI”), Brookfield Holdings Canada Inc. (“BHC”), Brookfield Property Master Holdings LLC (“BPMH”) and Brookfield Property Group LLC (“BPG” and collectively, the “BAM Group”). The address for Brookfield Asset Management, BUSHI and BHC is Brookfield Place, 181 Bay Street, Suite 300, Toronto, ON M5J 2T3 Canada and the address for BPG, BUSC Finance, BUSI and BPMH is Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY 10281. The Schedule 13G indicates that the BAM Group has shared voting and shared dispositive power with respect to 3,036,315 shares of Class A Stock.
5.Information regarding GXMC is based on a Schedule 13G filed by GXMC with the SEC on February 12, 2021. The address for GXMC is 605 Third Avenue, 43rd Floor, New York, NY 10158. The Schedule 13G indicates that GXMC has sole voting power and sole dispositive power with respect to 2,524,254 shares of Class A Stock.
6.Unless otherwise noted, the address of (i) Mr. Blidner is c/o Brookfield Asset Management, 181 Bay Street, Suite 300, Toronto, Ontario M5J 2T3; (ii) Ms. Atkinson and Messrs. Carneiro da Cunha, Chang, DeNardo, Maroun, McGregor, Rodert and Warren, is c/o Brookfield Property Partners Limited, 73 Front Street, 5th Floor, Hamilton, HM 12 Bermuda; and (iii) Messrs. Kingston and Davis is c/o Brookfield Property Group, Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY 10281.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Conflicts Policy
Our Governance and Nominating Committee has approved a Conflicts Policy designed to assist with the proper identification, review and disclosure of related party transactions. The Conflicts Policy addresses the approval and other requirements for transactions in which there is greater potential for a conflict of interest to arise. These transactions include:
•acquisitions by us from, and dispositions by us to, Brookfield Asset Management and its affiliates;
•the dissolution of the Company or its operating partnership;
•any material amendment to our Master Services Agreement;
•any material service agreement or other material arrangement pursuant to which Brookfield Asset Management or its affiliates will be paid a fee, or other consideration other than any agreement or arrangement contemplated by our Master Services Agreement;
•termination of, or any determinations regarding indemnification under, our Master Services Agreement; and
•any other material transaction involving us and Brookfield Asset Management and its affiliates.
Our Conflicts Policy requires the transactions described above to be approved by our Governance and Nominating Committee. Pursuant to our Conflicts Policy, the Governance and Nominating Committee may grant approvals for any of the transactions described above in the form of general guidelines, policies or procedures in which case no further special approval will be required in connection with a particular transaction or matter permitted thereby. The Conflicts Policy can be amended at the discretion of the Governance and Nominating Committee.
Related Party Transactions
Master Services Agreement
We have entered into a Master Services Agreement pursuant to which the Service Providers, wholly owned subsidiaries of Brookfield Asset Management, have agreed to provide or arrange for other Service Providers to provide management and administration services to our Company and its subsidiaries. The following is a summary of certain provisions of our Master Services Agreement. Because this description is only a summary of our Master Services Agreement, it does not necessarily contain all of the information that you may find useful. We therefore urge you to review our Master Services Agreement in its entirety. Our Master Services Agreement is available electronically on the website of the SEC at www.sec.gov and a copy may be obtained by writing to our Secretary at our principal executive offices.
Under our Master Services Agreement, we have appointed the Service Providers to provide or arrange for the provision of the following services:
•supervising the carrying out of all day-to-day management, secretarial, accounting, banking, treasury, administrative, liaison, representative, regulatory and reporting functions and obligations;
•providing overall strategic advice, including advising with respect to the expansion into new markets;
•supervising the establishment and maintenance of books and records;
•identifying and recommending acquisitions or dispositions from time to time and, where requested to do so, assisting in negotiating the terms of such acquisitions or dispositions;
•recommending and, where requested to do so, assisting in the raising of funds whether by way of debt, equity or otherwise;
•recommending suitable candidates to serve on the boards of directors or the equivalent governing bodies of us and our operating entities;
•making recommendations with respect to the exercise of any voting rights to which we are entitled in respect of our operating entities;
• making recommendations with respect to the payment of dividends or any other distributions, including distributions by our Company to our unitholders;
•monitoring and/or oversight of accountants, legal counsel and other accounting, financial or legal advisors and technical, commercial, marketing and other independent experts, and managing litigation;
•attending to all matters necessary for any reorganization, bankruptcy proceedings, dissolution or winding up, subject to approval by the relevant board of directors or its equivalent;
•supervising the making of all tax elections, determinations and designations, the timely calculation and payment of taxes payable and the filing of all tax returns;
•supervising the preparation of the annual consolidated financial statements, quarterly interim financial statements and other public disclosure;
•making recommendations in relation to and effecting the entry into insurance arrangements;
•arranging for individuals to carry out the functions of principal executive, accounting and financial officers for our Company only for purposes of applicable securities laws;
•providing individuals to act as senior officers, subject to the approval of the relevant board of directors or its equivalent;
•providing advice, when requested, regarding the maintenance of compliance with applicable laws and other obligations; and
•providing all such other services as may from time to time be agreed that are reasonably related to day-to-day operations.
The Service Providers’ activities are subject to the supervision of the board of directors or equivalent governing body of BPYU and of each of the other Service Recipients, as applicable. The relevant governing body remains responsible for all investment and divestment decisions made by the Service Recipient.
Pursuant to the Master Services Agreement, BPYU pays an annual base management fee to the Service Providers equal to 1.25% of the total capitalization of BPYU, subject to certain adjustments. The total capitalization value of BPYU is equal to the aggregate of the value of all of the outstanding Class A Stock and other securities of BPYU and its direct or indirect subsidiaries that are not held by BPYU, BPY and certain of their affiliates, plus all outstanding third-party debt with recourse against BPYU and any other direct or indirect subsidiary, less all cash held by such entities. For the first 12 months following the closing of the BPY Transaction, Brookfield Asset Management agreed to waive management fees payable by BPYU and the incremental management fees BPY would otherwise be required to pay in respect of the securities issued in exchange for the GGP common stock in the BPY Transaction. For the year ended December 31, 2020, there were no fees paid under the Master Services Agreement.
For any quarter in which the Board determines that there is insufficient available cash to pay the base management fee as well as the next regular distribution on Class A Stock, BPYU may elect to pay all or a portion of the base management fee in Class A Stock, subject to certain conditions. The base management fee is calculated and paid on a quarterly basis.
To the extent that under any other arrangement BPYU or its subsidiaries makes a payment that is determined to be comparable to the base management fee payable by BPYU, the base management fee payable by BPYU will be reduced on a dollar-for-dollar basis by the comparable base management fee, subject to certain limitations. In addition, to the extent that there are any residual fees, comparable to the base management fees payable by BPYU, that are not used to reduce the base management fees payable by BPY, the base management fee payable by BPYU will be reduced on a dollar-for-dollar basis by such residual fees.
Additionally, the Service Providers are reimbursed for any out-of-pocket fees, costs and expenses incurred in the provision of the management and administration services, including those of any third party. However, BPYU is not required to reimburse the Service Providers for the salaries and other remuneration of their management, personnel or support staff who carry out any services or functions for BPYU or overhead for such persons.
Incentive Distributions
An affiliate of Brookfield Asset Management is entitled to receive incentive distributions based on an amount by which quarterly distributions on the Class A Stock and series K preferred units of BPYU’s operating partnership exceed specified target levels. No incentive distributions were paid in the year ended December 31, 2020.
Financings
From time to time, Brookfield may loan funds to us or place funds on deposit with us, on terms approved by our Governance and Nominating Committee. The following arrangements were entered into during the year ended December 31, 2020:
•On February 10, 2020, the Company secured an $27.0 million subordinated unsecured note with Brookfield BPY Holdings Inc, and another $29.0 million note on March 25, 2020. The notes bear interest at rate equal to LIBOR plus 2.75%, and mature on February 10, 2030 and March 25, 2030, respectively.
•On May 19, 2020, the Company secured an additional $25.0 million subordinated unsecured note with Brookfield BPY Holdings Inc., and another $45.0 million on May 22, 2020. The notes were repaid in full on June 18, 2020 and July 16, 2020, respectively.
•On June 25, 2020, the Company secured another $25.0 million subordinated unsecured note at an interest rate equal to LIBOR plus 1.94% that is scheduled to mature on August 27, 2022.
•On July 16, 2020 and August 27, 2020, the Company made principal payments in the amount of $45.0 million and $22.1 million, respectively. The total outstanding balance of the notes as of December 31, 2020 was $63.2 million.
•The Company agreed to maintain an ongoing liquidity covenant (set at $500 million) which will be tested as of the last day of each month against the amount of unrestricted cash, undrawn available amounts under the Facility and undrawn amounts under the new Brookfield Liquidity Facility. The Company entered into and maintains a $500 million Brookfield Liquidity Facility and prior to the date the Company demonstrates compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment, any interest and principal payments thereunder must be paid-in-kind.
Other Services
Brookfield Asset Management and its affiliates may provide services to our subsidiaries which are outside the scope of our Master Services Agreement under arrangements that are on market terms and conditions, or otherwise permitted or approved by independent directors, pursuant to our Conflicts Policy, and pursuant to which Brookfield Asset Management will receive fees. The services that may be provided under these arrangements include financial advisory, property management, facilities management, development, relocation services, construction activities, marketing or other services. We may also provide similar services to Brookfield Asset Management and its affiliates that are on market terms and conditions, or otherwise permitted or approved by independent directors, pursuant to our Conflicts Policy, and pursuant to which we will receive fees. We paid or received the following fees for such services in the year ended December 31, 2020:
•Amounts received from Brookfield Asset Management and its subsidiaries for property management, leasing, tenant coordination, construction management, development management and marketing services - $22.8 million; and
•Amounts paid to Brookfield Asset Management and its subsidiaries for construction costs of development properties -$2.3 million.
Other Related Party Transactions
In connection with the BPY Transaction, Brookfield Asset Management entered into a rights agreement with Wilmington Trust Company whereby it agreed to satisfy, or cause to be satisfied, the obligations with respect to the secondary exchange rights contained in the Company’s Charter and deposit certain cash or securities in a collateral account in accordance with the agreement. In this agreement, Brookfield Asset Management was granted a consent right whereby prior to the issuance by BPYU of any shares of Class A Stock, BPYU will be required, for as long as Brookfield Asset Management is a party to the rights agreement, to obtain the consent of Brookfield Asset Management. The rights agreement will terminate on the earlier of the twentieth anniversary of the BPY Transaction or if there is no Class A Stock outstanding, other than Class A Stock owned by Brookfield Asset Management and its affiliates. Our Company is required to reimburse Brookfield Asset Management for all amounts paid to the rights agent (i) pursuant to the rights agreement including, in respect of services rendered, out-of-pocket expenses, counsel fees and other disbursements incurred in the administration and execution of the agreement and the exercise and performance of the rights agent’s duties thereunder, and (ii) in respect of any indemnification provided to the rights agent pursuant to the rights agreement.
BPYU, BPY, the BPY General Partner and BP US REIT LLC (“BPUS”), entered into a joint governance agreement, dated August 28, 2018 (the “Joint Governance Agreement”), intended to facilitate the governance of BPYU and BPY following the acquisition of all of the shares of common stock of GGP that BPY and its affiliates did not already own through a series of transactions (the “BPY Transaction”). Pursuant to the Joint Governance Agreement, BPUS has the right to designate candidates to be nominated for election to each directorship subject to election at any meeting of BPYU stockholders and BPYU will
include such nominees in its proxy statements without BPUS having to comply with the generally applicable provisions of the Company’s Bylaws regarding notice of stockholder nominations. The Joint Governance Agreement further provides that BPYU and the BPY General Partner will nominate an identical board of directors, except in limited circumstances. The nominees for the Board included in this Proxy Statement are also members of the board of directors of the BPY General Partner. Additionally, each of the BPY General Partner and BPYU have the right to expand its respective board of directors to add additional non overlapping independent members if it determines that the addition of non-overlapping board members is necessary to address or otherwise resolve a conflict of interest arising from its relationship with the other entity. Further, BPUS has the option, in its sole discretion, to cause each of the BPY General Partner and BPYU to expand the size of their respective boards, and to nominate one or more additional independent directors to fill the directorship created by such expansion.
Director Independence
A majority of the Board is independent. Of the ten directors currently serving on the Board, the Board affirmatively determined, based on the recommendation of the Governance and Nominating Committee, that Ms. Atkinson and Messrs. Carneiro da Cunha, DeNardo, Maroun, McGregor, Rodert and Warren are independent under the Nasdaq listing standards.
The Board reviewed director independence in February 2021. During this review, the Board considered transactions and relationships between each director nominee (including any member of his or her immediate family, if any) and the Company and its subsidiaries and affiliates. In making independence determinations, the Board considered each relationship not only from the standpoint of the director nominee, but also from the standpoint of persons and organizations with which the director nominee has a relationship. The purpose of this review is to determine whether any such relationship or transactions would interfere with the director’s or nominee’s independent judgment, and therefore be inconsistent with a determination that the director nominee is independent.
When assessing the independence of the directors designated by the BPY General Partner pursuant to the Joint Governance Agreement, the Board considered that they were nominated by significant stockholders of the Company but concluded that this did not impair their independence. As required by the Nasdaq listing standards, the Board considered whether the nominated directors themselves had a relationship with BPYU that would interfere with the director’s independent judgment in carrying out their duties as a director.
As a result of this review, the Board affirmatively determined that each of the current Board members, except Dr. Chang and Messrs. Clark and Blidner, is independent of the Company and its management under Nasdaq listing standards. Dr. Chang is not independent because he was appointed to the board of directors of the BPY General Partner as the representative of a large shareholder of BPY and Messrs. Clark and Blidner are not independent due to their employment with Brookfield Asset Management.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table summarizes the aggregate fees billed to BPYU for professional services rendered by its independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”):
Year Ended December 31, 2020 2019
Audit Fees(1)
$ 3,007,000 $ 3,155,600
Audit Related Fees(2)
2,525,225 3,000,378
Tax Fees(3)
33,740 32,130
All Other Fees - -
Total $ 5,565,965 $ 6,188,108
1.Audit fees consisted principally of the audits of the Company’s annual consolidated financial statements, internal
control over financial reporting, reviews of the consolidated financial statements included in the Company’s Quarterly
Reports on Form 10-Q, comfort letters, and reviews of other filings or registration statements under the Securities Act
of 1933, as amended, and Securities Exchange Act of 1934, as amended (the “Exchange Act”).
2.Audit-related fees consisted primarily of various audits of individual or portfolios of properties to comply with lender, joint venture partner or tenant requirements. The 2020 and 2019 fees exclude $0 and $256,600, respectively, related to consents provided for the 2019 and 2018 consolidated financial statements of the Company included in registration statements of BPY and its affiliates; all such fees were reimbursed by BPY.
3.Tax services consisted principally of services necessitated by the Company’s ongoing tax compliance requirements.
Audit Committee’s Pre-Approval Policies and Procedures
We have adopted written policies that provide that the Audit Committee is to pre-approve all audit services and permitted non-audit services to be performed for us by our independent registered public accounting firm in accordance with applicable law. During the fiscal year ended December 31, 2020, all audit and non-audit services provided to us by Deloitte were pre-approved by the Audit Committee.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Consolidated Financial Statements and Consolidated Financial Statement Schedule.
The consolidated financial statements and consolidated financial statement schedule listed in the accompanying Index to Consolidated Financial Statements and Consolidated Financial Statement Schedule are filed as part of this Annual Report.
(b) Exhibits.
Incorporated by Reference Herein
Exhibit
Number Description Form Exhibit Filing Date File No.
2.1*
Agreement and Plan of Merger, dated as of March 26, 2018, by and among Brookfield Property Partners L.P., Goldfinch Merger Sub Corp. and the Predecessor.
8-K 2.1 3/27/2018 001-34948
2.2*
Amendment to Agreement and Plan of Merger, dated as of June 25, 2018, by and among Brookfield Property Partners L.P., Goldfinch Merger Sub Corp. and the Predecessor.
S-4/A 2.2 6/25/2018 333-224593
3.1
Fourth Amended and Restated Certificate of Incorporation of Brookfield Property REIT Inc.
8-K 3.1 6/25/2019 001-34948
3.2
Fifth Amended and Restated Bylaws of Brookfield Property REIT Inc.
8-A12B 3.2 8/27/2018 001-34948
4.1*
Redemption Rights Agreement (Common Units) dated November 27, 2002, by and among GGP Limited Partnership, the Predecessor and JSG, LLC.
10-K 4.13 2/27/2009 001-11656
4.2*
Redemption Rights Agreement dated December 11, 2003, by and among GGP Limited Partnership, the Predecessor and Everitt Enterprises, Inc.
10-K/A 4.14 4/30/2010 001-11656
4.3*
Redemption Rights Agreement dated March 5, 2004, by and among GGP Limited Partnership, the Predecessor and Koury Corporation.
10-K 4.15 2/27/2008 001-11656
4.4
Modified Redemption Rights Agreement, dated August 28, 2018, between Brookfield Property REIT Inc. and BPR OP, LP.
10-Q 4.1 5/10/2019 001-34948
4.5
Modified Redemption Rights Agreement, dated August 28, 2018, between Brookfield Property REIT Inc. and BPR OP, LP.
10-Q 4.2 5/10/2019 001-34948
4.6
Indenture, dated as of May 1, 2019, by and among Brookfield Property REIT Inc., BPR Nimbus LLC, BPR Cumulus LLC and GGSI Sellco, LLC, as issuers, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent.
8-K 4.1 5/2/2019 001-34948
4.7
Description of securities.
10-K 4.7 2/2/2020 001-34948
10.1
Sixth Amended and Restated Agreement of Limited Partnership of BPR OP, LP.
8-K 10.1 6/25/2019 001-34948
Incorporated by Reference Herein
Exhibit
Number Description Form Exhibit Filing Date File No.
10.2*
Operating Agreement of GGP/Homart II L.L.C., dated November 10, 1999, between GGP Limited Partnership, NYSCRF, and GGP/Homart II L.L.C.
10-K 10.20 3/31/2006 001-11656
10.3*
Amendment to Operating Agreement of GGP/Homart II L.L.C., dated November 22, 2002.
10-K 10.21 3/31/2006 001-11656
10.4*
Letter Amendment to the Operating Agreement of GGP/Homart II L.L.C., dated November 22, 2002.
10-K 10.22 3/31/2006 001-11656
10.5*
Second Amendment to the Operating Agreement of GGP/Homart II L.L.C. dated January 31, 2003.
10-K 10.23 3/31/2006 001-11656
10.6*
Third Amendment to the Operating Agreement of GGP/Homart II L.L.C. dated February 8, 2008.
10-K 10.25 2/27/2008 001-11656
10.7*
Second Amended and Restated Limited Liability Company Agreement of Ala Moana Holding, LLC, dated April 10, 2015.
10-Q 10.1 5/1/2015 001-34948
10.8#
Amended and Restated Brookfield Property REIT Inc. 2010 Equity Incentive Plan adopted August 28, 2018.
S-8 4.3 8/29/2018 333-227086
10.9*
Amended and Restated Loan Agreement, dated as of April 25, 2016, by and among certain subsidiaries of the Predecessor, each as the Borrowers, the Lenders party thereto, Wells Fargo Securities, LLC, in its capacity as Joint Lead Arranger and Bookrunner, and U.S. Bank National Association, in its capacity as Administrative Agent, Joint Lead Arranger, and Bookrunner.
8-K 99.1 4/29/2016 001-34948
10.10
Master Services Agreement, dated as of August 27, 2018, by and among Brookfield Asset Management Inc., Brookfield Property REIT Inc., BPR OP, LP, Brookfield Global Property Advisor Limited, Brookfield Property Group LLC and Brookfield Asset Management Private Institutional Capital Adviser US, LLC.
8-K 10.3 8/28/2018 001-34948
10.11
Joint Governance Agreement, dated as of August 28, 2018, by and among Brookfield Property REIT Inc., Brookfield Property Partners LP, Brookfield Property Partners Limited and BP US REIT LLC.
8-K 10.5 8/28/2018 001-34948
10.12
Credit Agreement, dated as of August 24, 2018, by and among Brookfield Retail Holdings VII Sub 3 LLC, Brookfield Property REIT Inc., GGP Nimbus, LLC, GGP Limited Partnership LLC, BPR OP, LP, GGSI Sellco, LLC, GGPLP Real Estate 2010 Loan Pledgor Holding, LLC, GGPLPLLC 2010 Loan Pledgor Holding, LLC, GGPLP 2010 Loan Pledgor Holding, LLC, and GGPLP L.L.C., each of the foregoing as the Borrowers, the Lenders party thereto, the Issuing Banks party thereto, the Swingline Lender party thereto, Morgan Stanley Senior Funding, Inc., in its capacity as co-administrative agent for the Term Lenders under the Term B Facility, and Wells Fargo Bank, National Association, in its capacities as administrative agent and collateral agent for the Lenders.
8-K 4.1 8/28/2018 001-34948
Incorporated by Reference Herein
Exhibit
Number Description Form Exhibit Filing Date File No.
10.13
First Amendment to the Credit Agreement, dated as of July 29, 2020, by and among Brookfield Retail Holdings VII Sub 3 LLC, a Delaware limited liability company, Brookfield Property REIT Inc., a Delaware corporation (f/k/a GGP Inc.), BPR Nimbus LLC, a Delaware limited liability company (f/k/a GGP Nimbus, LLC), BPR Cumulus LLC, a Delaware limited liability company (f/k/a GGP Limited Partnership LLC), BPR OP, LP (f/k/a GGP Operating Partnership, LP), a Delaware limited partnership, GGSI Sellco, LLC, a Delaware limited liability company, GGPLP Real Estate 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company, GGPLPLLC 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company, GGPLP 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company and GGPLP L.L.C., a Delaware limited liability company, the Lenders party hereto, and Wells Fargo Bank, National Association, in its capacities as administrative agent and collateral agent for the Lenders.
8-K 10.1 7/29/2020 001-34948
21.1
List of Subsidiaries of Brookfield Property REIT Inc. (filed herewith).
23.1
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, relating to Brookfield Property REIT Inc. (filed herewith).
24.1
Power of Attorney (included on signature page).
31.1
Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith).
31.2
Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1
Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2
Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.SCH Inline XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
Incorporated by Reference Herein
Exhibit
Number Description Form Exhibit Filing Date File No.
104 Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) (filed herewith).
_______________________________________________________________________________
* Incorporated by reference to filings by GGP Inc. (formerly GGP, Inc. and General Growth Properties, Inc. and referred to as the "Predecessor")
# Management contracts and compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.
(c) Separate financial statements.
Not applicable.