August 11, 2009 / 9:26 PM / 10 years ago

UPDATE 1-Brookfield sets up $4 bln real estate consortium

* Launches turnaround pool for distressed assets

* Group includes institutional real estate investors

* Brookfield Properties to raise $900 mln in shr offering (Adds details; in U.S. dollars unless noted)

TORONTO, Aug 11 (Reuters) - Brookfield Asset Management (BAMa.TO) and Brookfield Properties BPO.TO said on Tuesday they will launch a $4 billion investor consortium aimed at turning around undervalued and underperforming real estate during the “current distressed economic environment.”

The consortium will consist of Brookfield Properties, majority owned by Brookfield Asset Management, as well as a number of institutional real estate investors who have each allocated between $300 million and $1 billion.

Investments may be on an equity or debt basis, and may be implemented in a variety of ways, such as restructurings, portfolio repositionings, or redevelopments. These investments will be focused on North America, Europe and Australasia, Brookfield said.

“We believe that the current distressed economic environment and the dislocation both in real estate values and financing availability creates a compelling opportunity to pursue transactions on a global basis where we can utilize our restructuring and operating capabilities,” said Cyrus Madon, senior managing partner, restructurings, at Brookfield.

Separately, Brookfield Properties said it would raise $900 million in a common share offering. [ID:nWNBB3917]

About $450 million will be issued to the public, while Brookfield Asset Management also plans to buy common shares from Brookfield Properties to maintain its voting interest.

Brookfield Asset Management currently holds an 51 percent stake in Brookfield Properties, one of Manhattan’s largest landlords.

RBC Capital Markets, Citi, Deutsche Bank Securities and TD Securities will act as joint book-running managers and underwriters for the proposed public offering.

$1=$1.10 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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