TORONTO — Brookfield Properties Corp., a Toronto-based real REIT that owns and operates four properties near the former site of the World Trade Center (WTC), said Monday that most tenants will return to their offices within about eight weeks.
"Given the proximity to what is now referred to as ‘Ground Zero,’ it is amazing that so little damage was incurred to our properties," said Bruce Flatt, president and CEO of Brookfield, referring to the terrorist attack on Sept. 11 that killed thousands and destroyed millions of square feet of office space. "The damage we have sustained may look like a lot, but in the context of the events, we have been extremely fortunate."
Brookfield’s properties include One Liberty Plaza and two towers in the World Financial Center. In addition, the company owns a 50% stake in Tower Four of the World Financial Center.
Flatt said the buildings are all structurally sound despite reports to the contrary. Brookfield’s engineering staff and independent engineering consultants — including Thornton-Tomasetti Group, Gilasanz Murray Steficek, Turner Construction and structural specialists from the Federal Management Agency (FEMA) — completed a thorough inspection last Friday confirming that there is no structural damage to the properties.
Flatt has notified shareholders that Brookfield will still meet earnings expectations despite the damage sustained by the Sept. 11 attacks. "I can say with confidence that we will meet our cash flow and earnings targets," he said. "This assertion is based on the diversity of our portfolio, our high-quality tenant base, the nature of our leases and the broad coverage provided by the insurance we have in place."
The insurance covers acts of terrorism, business interruption and property damage. Brookfield will be covered for the full cost of the repair work on its properties, which already is in progress.
Brookfield’s leases also ensure that the cash flow will continue. Flatt said that two of the four downtown properties, which comprise more than 50% of the operating income from its downtown properties, are triple net, bond-leased buildings where the tenants pay the rent and costs regardless of events that occur. "In our other two downtown properties, tenants cannot terminate leases for at least 18 months of non-occupancy, based on our standard lease agreement," he said. Flatt said repairs are proceeding as planned.
Brookfield also is in daily contact with its tenants. The company established a toll-free number for its tenants (888-540-1027). Flatt said the company also is helping tenants find temporary office space.