Brookfield Asset Management, one of the world's largest real estate owners, has changed up its top management just as it completed raising $16 billion to snap up properties.
The company has promoted Lowell Baron, naming him CEO of its global real estate group. Baron, a 20-year veteran of Brookfield Asset Management, was most recently president and chief investment officer for that unit. He will retain his role as chief investment officer as well as serving as CEO.
Baron succeeds Brian Kingston, who was appointed executive chairman and will remain "actively involved in the business," according to Brookfield Asset Management President Connor Teskey.
He informed employees of the management changes in an internal memo on Tuesday that CoStar News viewed. The contents of the memo, earlier reported by Bloomberg News, were confirmed by a Brookfield spokesperson on Wednesday.
As part of the changes, Ben Brown and Brad Hyler will become copresidents of Brookfield’s real estate group, "allowing them to take on broader responsibility for the real estate business globally in addition to their regional roles for the Americas and Europe," Teskey said.
As reflected in its name, Brookfield Asset Management is the asset management arm of New York-based Brookfield, a holding company with other businesses. The real estate division builds, owns and actively manages institutional-quality properties diversified across various real estate sectors, including retail, office, housing and hospitality. It manages $272 billion of assets, according to its website.
Seeking significant discounts
Commercial real estate has had a rocky path in the past few years, reeling in the aftermath of the pandemic, high interest rates, plunging valuations and economic uncertainty. In that environment, Brookfield Asset Management sees an opportunity to pick up high-quality properties at significant discounts and take advantage of what it called "dislocation." It recently raised roughly $16 billion for Brookfield Strategic Real Estate Partners V, closing on nearly $6 billion of that fund's capital in the first quarter, according to company officials.
"With final closings from clients ... still ahead, this will be our largest real estate strategy ever raised," Teskey said on an earnings call last month, pointing out the success "despite a more challenging fundraising environment" for real estate in recent years.
"The strength of this fundraise was very indicative that investors realized this fund will deploy capital from 12 months ago to two or three years into the future," he said. "And no doubt, we are going to catch the bottom during that timeframe. And that made this a vintage that many of our most sophisticated and large-scale partners did not want to miss."
Brookfield Asset Management had an active first quarter. In real estate, it deployed $1.8 billion of capital, including into global logistics platforms within North America, Europe and Asia. In addition, it said it invested over $100 million of equity capital into a portfolio of U.S. single-family rental properties, spanning nearly 3,800 homes.
The company "monetized $1.2 billion of equity capital," which included selling some assets related to an acquisition of Tritax, a property firm focused on large-scale logistics properties assets in Europe, as well as the PGA National Resort in Palm Beach Gardens, Florida. That property sold for $422.5 million, according to CoStar data.
Brookfield Asset Management announced it was moving its head office from Toronto to New York in November.