BPO Properties Ltd. Independent Directors Unanimously Recommend In Favour Of Proposed Merger With Brookfield.

Business Editors

TORONTO--(BUSINESS WIRE)--May 28, 2003

BPO Properties Ltd. (TSX:BPP) today announced that it has mailed to shareholders its Management Information Circular with respect to the scheduled June 18, 2003 annual and special meeting of shareholders. In addition to the regular annual business of the company, holders of BPO Properties common and preferred shares will be asked to vote upon the previously-announced proposal to merge the company with a subsidiary of Brookfield Properties Corporation (BPO: NYSE, TSX).

If the proposed merger transaction is approved by a majority of the minority holders of BPO Properties common shares and by a special resolution of the holders of BPO preferred shares, shareholders will receive, at their election, for each BPO common share held either: (i) $27.83 in cash; (ii) 0.9386 common shares of Brookfield Properties Corporation; (iii) $13.00 cash and 0.5 common shares of Brookfield Properties Corporation; or (iv) any other combination of cash and common shares of Brookfield Properties Corporation as may be specified by such shareholder having a combined value not exceeding $27.83. Holders of BPO Properties preferred shares will receive preferred shares of the amalgamated entity which will be identical in all material respects to their existing preferred shares.

Structure of Merger Transaction Amended

At the time the proposed transaction was announced on April 28, 2003, the aggregate amount of cash and Brookfield Properties shares payable or issuable pursuant to the transaction was to be limited to C$40.2 million and 1.55 million Brookfield Properties common shares. Following discussions between Brookfield and the Independent Committee of the Board of BPO Properties, these maximums were eliminated.

Independent Directors Recommend the Transaction

The members of the Independent Committee of the Board of Directors of BPO Properties unanimously recommended that the BPO Properties Board approve the proposed transaction and recommend to the minority shareholders that they vote in favour of the resolution approving the merger.

The Independent Committee retained Davies Ward Phillips & Vineberg to provide legal advice, and engaged RBC Capital Markets to deliver a formal independent valuation and fairness opinion in connection with the proposed transaction, the full text of which is included in the Management Proxy Circular.

The Board of Directors of BPO Properties Ltd. would encourage all shareholders to attend the annual and special meeting of the Corporation's shareholders to be held on June 18, 2003 at 1:00 p.m. (local time) at Bankers Hall Auditorium, Bankers Hall, 855 2nd Street West, Calgary, Alberta.

BPO Properties Ltd. is a Canadian real estate investment company focused on the ownership and value enhancement of premier office properties. The current property portfolio is comprised of interests in 19 commercial properties and development sites totaling 15 million square feet. The Company's objective is to realize superior financial returns for its shareholders by enhancing the value of its real estate assets and by making opportunistic investment in new assets. BPO Properties common shares trade on the TSX under the symbol BPP. Further information about the company can be found at www.bpoproperties.com.