Brookfield Reports Record Leasing Activity, Raises Forecast

Brookfield Office Properties, the landlord with holdings in America, Canada and Australia, including the now infamous Zuccotti Park, reported 8.2 million square feet of leasing activity following the third quarter, surpassing its record leasing levels in pre-recession 2007.

The publicy traded company raised its outlook for 2011 funds from operations, which measures the company's ability to generate income, to $1.12 to $1.14 per share, up from $1.05 to $1.10.

However, third quarter funds from operations fell 2.5 percent to $155 million, or 30 cents a share, down from $159 million and 32 cents in 2010. Operating income increased to $276 million, up from $175 million in 2010, mainly attributed to the company's acquisition of offices in Sydney, Melbourne and Perth.

Although Brookfield's leasing activity has been brisk, it faces over 3 million square feet in upcoming vacancy at World Financial Center. The Japanese bank Nomura is leaving World Financial Center for Midtown, along with accounting firm Deloitte Touche, which is going to 30 Rockfeller Center.

Brookfield announced earlier this week that it renewed leases for 767,000 square feet to Bank of America and Merrill Lynch in 2 and 4 World Financial Center, adjacent to the World Financial Center. Brookfield acquired Bank of America's 49 percent stake in the 1.9 million square foot Four World Financial Center - previously the Merrill Lynch headquarters when it was a stand-alone company - for $264 million earlier in the third quarter.

In an earnings call on Friday, officials from the company said they are in active discussions for large tenants at World Financial Center, including both financial companies and others industries. It is also speaking to high-profile retailers and restaurants for World Financial Center's renovated retail space, including tenants without a presence in Lower Manhattan, another sign of the changing area.

Interest has matched - possibly even exceeded - our expectations, said Ric Clark, Brookfield's CEO.

Brookfield is also building a massive development on Manhattan's west side that will total 5.2 million square feet, with construction beginning at the start of next year, and seeking large tenants there.

The employment picture has remained stagnant, said Clark, but he added that large tenants are looking to cut costs and consolidate space, an encouraging trend for new office development.

Brookfield continues to eye acquisitions, but is looking outside competitive markets like New York, company officials said. It has agreed to buy a Denver building for $200 million, Denver Business Journal reported last week.

The company were trading around $16.45 per share mid-Friday, down 1.79 percent.