Brookfield Properties has recently cut several executives in its office division as part of a major company restructuring.
The firm is transitioning from being primarily a property-focused company into a Wall Street-style fund manager, similar to Blackstone.
This evolution includes a move away from regional management towards a national leadership structure.
Executives Laid Off in Key Locations
On Thursday, Brookfield Properties, which operates one of the largest commercial real estate portfolios in the United States, laid off several executives.
In its New York headquarters, the company let go of three office leasing executives, an executive responsible for asset management, and an employee from the internal group managing art installations and events.
Nationally, “a handful” of employees were also laid off, including roles in Los Angeles and Houston.
Brookfield’s Expansive Asset Portfolio
Brookfield Properties is a subsidiary of Brookfield, a global investment firm managing over $1 trillion in assets.
Among these assets is 65 million square feet of U.S. office space.
Shift in Business Strategy
An internal memo shared with employees explained that the restructuring reflects the company’s shift from managing long-term office investments to overseeing various investment strategies.
These strategies involve more frequent asset sales to recycle capital and meet diverse return goals.
The memo stated that the business has evolved “from one largely comprised of forever-hold, balance sheet assets to a mix that also includes properties held in fund strategies with varied hold periods and return goals.”
From Commercial Real Estate to Multi-Asset Investment Firm
Brookfield Properties was once widely recognized for its focus on commercial real estate, especially office buildings such as Brookfield Place in Lower Manhattan.
Today, the company controls investments across multiple categories, including insurance, credit, infrastructure, and real estate.
Its growth has led to comparisons with major asset managers like Blackstone.
New National Management Structure
The restructuring reorganizes the office division’s management and operations from a regional approach to a nationally focused team.
In 2023, Brookfield Properties appointed Bobby Swennes as the U.S. president of its office division.
Swennes’s role remains unchanged under the new structure, but several executives will now hold national roles reporting to him.
The company’s memo explained that the new structure would “drive the business by function rather than geography, transitioning from a region-head model to a function-lead model.”
This change aims to improve portfolio-wide strategy and decision-making.
Outsourcing and Operational Changes
Alongside this shift, Brookfield Properties has reduced its in-house operations staff in favor of outsourcing to third-party service providers.
For example, last year, the company outsourced property management of its U.S. office portfolio to CBRE, a real estate services and brokerage firm.
Challenges and Recovery in the Office Sector
Brookfield’s office business has faced challenges in recent years due to pandemic-related drops in office occupancy and demand.
The company even defaulted on several office towers in downtown Los Angeles.
In 2023, Brookfield Properties laid off dozens of employees, according to reports at the time.
However, its focus on high-end properties has helped its office portfolio rebound from these setbacks.
Expansion Beyond Office Real Estate
Additionally, Brookfield has expanded beyond office real estate into rental apartments and industrial warehouses.
Over the past 18 months, the company acquired about $10 billion in assets across these sectors.
This diversification forms part of Brookfield’s broader strategy to evolve from a traditional property manager into a multi-asset investment firm.