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$177m Brookfield buy nudges fund towards $1b.

The Brascan Real Estate Opportunity Fund, (BREOF), established by Brookfield Asset Management in 2004, has completed the acquisition of a portfolio of 25 commercial properties, primarily industrial and showroom, in seven major U.S. markets from Developers Diversified Realty for US$177 million.

The acquisition takes the fund closer to its $1 billion target size,.

The DDR portfolio totals 3.2 million square feet and is comprised of 12 properties in Dallas, TX totaling 1.2 million square feet, five properties in Houston, TX totaling 656,000 square feet, three properties in Norfolk, VA totaling 654,000 square feet, two properties in Phoenix, AZ totaling 293,000 square feet, three properties, one each in Milwaukee, WI, Orlando, FL, and St. Louis, MO, totaling 371,000 square feet.

"The acquisition of this large portfolio of properties significantly expands our Fund, bringing the assets under management to approximately US$500 million and furthers our strategy of investing opportunistically in North American real estate", commented David Arthur, President and CEO of BREOF. "The diverse markets in which these properties are located builds on our recent acquisition of a 900,000 square foot Washington, D.C. portfolio, as well as our existing investments in commercial real estate in Indianapolis and Toronto and our joint venture in U.S. student housing development.

"Together, the assets in the Fund provide us with the unique opportunity to put Brookfield Asset Management's real estate platform and expertise to work in leasing and repositioning commercial real estate to create value and superior returns."

With a target Fund size of $1 billion, BREOF continues to evaluate additional opportunities to acquire and reposition real estate in markets in which Brookfield Asset Management has access to superior market knowledge, or secondary markets with the appropriate risk profile.

"Through active management, leasing and refinancing of undervalued properties" added Arthur, "we believe we can create enhanced returns for potential institutional investors in the Fund".
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Publication:Real Estate Weekly
Date:Oct 12, 2005
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