Sandeep Mathrani‘s General Growth Properties will be taking over leasing at Brookfield Place, according to sources with intimate knowledge of the arrangement.
Brookfield Property Partners, which opened the 250,000-square-foot retail center Brookfield Place at 250 Vesey Street in March, has been winding down its Brookfield Place leasing team. As of last week, Mark Kostic left his position as manager of retail leasing at Brookfield and started as senior general manager of retail, leasing and asset management at Related Companies. At the end of April, Ed Hogan, the national director of leasing at Brookfield, was hired to oversee leasing at Vornado Realty Trust, as CO previously reported.
Philadelphia brokerage McDevitt Company, which consulted on Brookfield Place, completed its leasing contract a couple of weeks ago, said Wade McDevitt, the founder of McDevitt Company. And luxury retail broker Soozan Baxter of Soozan Baxter Consulting ended her Brookfield Place leasing contract at the end of March.
It makes sense that Brookfield would turn to GGP to oversee the complex like a third-party manager would as Brookfield owns a stake in GGP and two of Brookfield’s executives, Richard B. Clark, chief executive office of Brookfield Property Group and senior managing partner of Brookfield Asset Management, and Brian W. Kingston, chief investment officer of Brookfield Property Group and senior managing partner of Brookfield Asset Management, are on GGP’s board of directors.
Brokers said the move is logical from an operating perspective.
“Brookfield doesn’t know much about managing retail,” one broker who has done deals at Brookfield Place said. But he assured: “Sandeep’s a smart guy. They know every tenant in the world.”
Another broker said because the project is basically leased up, the arrangement should work.
“I think they did a pretty good job with [leasing Brookfield Place],” that broker said. “It’s not like they have a lot of holes to fill over there in the short term.”
One broker said about 8 to 10 percent of the retail project is vacant, with those spaces ranging from 500 to 6,000 square feet a piece.
There is some concern about how well GGP will do in terms of operating a luxury project.
“I think if you look at GGP’s portfolio, it’s rather ordinary, not extraordinary,” one source said. “Their core competency isn’t luxury. From a leasing perspective I don’t know how great their talent bench is to lease it up effectively. From an operations perspective it’s great.”
Ms. Baxter and Mr. Kostic declined to comment. Two spokespeople for Brookfield didn’t immediately respond to requests for comment and nor did a spokesman for GGP.