Brookfield Property plans shopping spree for deals in hard-hit oil capitals Calgary and Houston

Brookfield Property Partners LP is looking for buildings in United states cities hardest hit through the oil slump, as pressure on the local economies creates discounts.

Alberta is a place where Brookfield can find affordable prices on properties and energy-related businesses, chairman Ric Clark said in an interview in Dubai now, where the company announced intends to build a $1 billion skyscraper with a partner. Brookfield can also be taking a look at apartment towers in Houston, he explained.

“Canada is within good shape overall, but there are some pockets of opportunity and that we may well do some purchasing those markets.” Clark said. “We’ve done little investing during the last five, maybe even 10 years” in Canada, “but they are starting to see some opportunities.”

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Office values have slumped in Houston, and office vacancy rates have reached 18 percent in central Calgary, based on property broker CBRE Group Inc. Both oil-dependent cities have experienced unemployment climb after oil prices came by a lot more than 75 per cent from the full of 2014.

Bruce Flatt, ceo of Brookfield Asset Management Inc., the majority shareholder of Brookfield Property, said earlier this year that Canada is ripe for investment because of its weak currency and a slide in commodity values.

Brookfield Property owns offices in Calgary including the Bankers Hall East complex and Brookfield Place East, that is due to finish the coming year. Cenovus Energy Inc. is signed on as a lead tenant to consider one million square feet (93,000 square meters) out of the 2.4 million sq ft across two towers.

Clark said Brookfield isn’t concerned about its very own occupancy thanks to the long-term leases it’s in place.

Still, Brookfield may struggle to find the deals it’s seeking in Calgary even if the city is feeling pressure from the oil sump, according to some analysts.

“There are no discounted assets,” said Paul Morassutti, an executive managing director at CBRE in Canada. “No owners are under distress. None have intention of selling at a reduced price into this market.”

Brookfield recently cashed in on properties in two of Canada’s headiest areas. It sold a 17-storey office building in Toronto’s financial core to Anbang Insurance Group Co. this past year and it is while selling the Royal Center in Vancouver. Clark said in August the investor intends to sell a lot more than $1 billion in assets in mature market to raise money for acquisitions.

Media reports emerged Wednesday that German multi-billionaire Klaus-Michael Kuehneindicated was near to a deal for that Royal Center in excess of $425 million.

“Real estate markets, oil, commodities markets are all cyclical,” Clark said. “Demand and supply always change up the value and now there is lots of supply for energy.

Bloomberg News