Ben Brown, Brookfield’s Real Estate Chief, On REITs, Housing, Office and Hospitality
Just don’t ask him about Danny Meyer’s new restaurant
Ben Brown is the first to admit it: “I drink my own Kool-Aid.”
Brown is co-president and head of real estate in the Americas for Brookfield — and, if you were going to drink a company’s Kool-Aid, you couldn’t do much better.
“We’ve built this business for this exact environment,” Brown told Commercial Observer at the firm’s offices at 225 Liberty Street late last month.
Indeed, Brookfield’s numbers can only be described as staggering: $258 billion in real estate assets under management; 79,000 apartments; another 74,000 student housing beds; 165 million square feet of logistics space; 189 million square feet of office; 107 million square feet of retail (and 2 million square feet of entertainment space); 43,000 hotel keys…. One could go on.
At times of market choppiness and uncertainty, a company of such scale might be tempted to sit back and let events simply shake out as they may, but Brookfield has been anything but passive in the last year and a half. In fact, it’s executed about $9 billion in credit originations, $21.5 billion in equity dispositions, $32.3 billion in acquisitions — oh, and it’s also raised $13.2 billion in new capital.
At the center of all this real estate activity is the cheerful, clear-eyed Brown. The father of two girls who recently moved to Brooklyn’s Cobble Hill, Brown grew up in South Florida, the son of a mutual fund adviser who, as a second career, did a little development on the side. Brown went to Northeastern University, and stayed in Boston after graduation to work for a private equity fund.
“Honestly, coming to Brookfield was dumb luck,” Brown said. “I sent my resume into a job posting and interviewed with a bunch of people over a couple of days.” Now, he’s in his 17th year at the firm. He sat down with Commercial Observer to describe Brookfield’s recent real estate spree. This was a few days before word got out that Brookfield was expected to buy a 10 percent stake in the $3.5 billion, 6.2 million-square-foot office campus in Manhattan’s red-hot Hudson Square. So, when Brown says the firm has big plans, you should believe him.
This interview has been edited for length and clarity.
Commercial Observer: When we were doing the Power 100 in May, you told us that 2025 was the most active year for the real estate business ever. How does 2026 rank?
Ben Brown: Believe it or not, we’re on pace to be on top of that, if not ahead. I think last year we did just under $10 billion of new investments, maybe $8 billion or $9 billion globally. This year, to date, we’re up to about $16 billion.
The inverse is that last year we were very active sellers — we did $16 billion of total dispositions last year. So far, year-to-date, we’re at $5 billion.
So, if you look at both of those numbers we’re on pace to reach our numbers last year in terms of total transaction activity — or, maybe just slightly behind — but we’ve been really active for the last 18 months. It’s been some of the most active times in our real estate business I can recall.
And it’s across every aspect of our business. We continue to find ways to make things happen, not only at scale, but with pretty meaningful things that we are pretty excited about.
What specifically are you thinking of?
All things logistics and housing. On housing, we have a handful of large and pretty transformational acquisitions. On the logistics side, it’s not only your traditional industrial warehouses, distribution facilities, infill assets, but also the second derivatives — things like self-storage.
We announced we’re doing the largest ever take-private of an Australian listed real estate company in national storage. And in the U.S., we just finished the acquisition of Peakstone, which was a public-to-private acquisition of a logistics-focused business, which was both bulk distribution and industrial outdoor storage — so, a little bit of exposure across sort of both typologies. Great businesses, good teams.
That is a follow-up of a handful of other large logistics transactions we’ve really done over the past 12 to 15 months that have continued to allow us to buy things at a really good basis, really good value, at scale.
While there still is very little liquidity at scale, there’s a tremendous amount of liquidity for things like logistics and rental housing. In the U.S. alone on three transactions — Peakstone and two other portfolios — the total gross value of the acquisitions was probably close to $4.5 billion, $5 billion. We’ve taken about a quarter of that portfolio already and sold that back into the market.
So, we bought these things at scale and broke them up into much smaller things that are much more liquid. And there’s a very observable discount in premium between those two dynamics, and we’ve been taking advantage of that.
One of the sibling asset classes to industrial is data centers. What’s Brookfield’s position on that?
When you talk about data centers generally, you can draw a pretty large circle around that addressable market because that includes power, land and compute. Our business is uniquely situated to be best in class in all of those things.
We’re invested in power, power generation, renewable energy. So, when you have the expertise to understand and control power delivery, if you understand and can source and de-risk land, you understand entitlements and delivery, you can put those things together. You should have the best components to be a leading investor and developer of digital assets, and I think that’s what we are.
We’ve been investing in data centers for the past 14 years. They’ve become something maybe quite different, but the components are the same. I would tell you that we’re focused on investing behind this theme across the entire Brookfield business.
Where do you like housing in America? Are there certain regions that you’re focused on and others you’re staying away from?
I’d say more broadly it’s probably subsector focused. We have been quite active buying apartments in the Southeast and Southwest markets where there was a little overhang of supply. These are the markets where we continue to see migration and population growth.
On the senior housing transaction side there was a very large transaction — $2.5 billion — that was concentrated primarily in the Boston and New England market. We really like Massachusetts, Connecticut and New Hampshire from a senior housing perspective, because they’re high affluency, high barriers to entry for new supply.
We did a very large manufactured housing business, which was across the entire country. Really, it was the largest non-public manufactured housing platform in the country, that closed earlier this year.
I would say our approach is less specific to a region on the housing side and more around what subset we’re invested in, and where. The answer would be different on the student housing side, versus the senior housing side versus traditional apartments, et cetera.
What do you think of New York housing?
New York housing is interesting right now because there’s very little new supply. That means there should continue to be an upper trajectory on rents. We continue to see New York be a magnet for young people wanting to be here, and so that demand side is not letting up. You’ve seen a little bit of that constraint on supply come through with conversions, but in the context of the overall market it’s a small component.
So, we like New York — but New York is a tough place to buy and a tough place to buy well. We’ve been a little more active on the affordable side and making investments in affordable housing.
Given the fact that interest rates seem pretty stagnant, are there distress opportunities out there that you guys are looking at?
What you really need today to be able to find interesting opportunities — where you can buy things at great value — is you need a catalyst. Because if you didn’t have to do something today — with where rates are, where volatility is, and where pricing is — you may decide not to do a deal. You may decide to wait.
I do think that the prospect of rates going down feels much further off than maybe it did 12 months ago. And people’s ideas that yield compression, again, would come and save the day feels a little further afield. But you still do need a catalyst to bring buyers and sellers together. And I think the rate environment is doing exactly that.
It feels like we’ve had a lot of catalysts that should have made these things happen.
It’s amazing, actually, how resilient markets have stayed. We live in our real estate bubble. We say, “Oh, man, I would have thought through all of all of this turbulence, we thought we would have seen more distress,” right?
But, when you look at what the broader market has done, you look at the recovery of the S&P 500 and you look at what has actually happened in sort of the broader financial markets — and then you zero in on the proxy for that in our world, which would be the CPPI index [Green Street’s commercial property price index] — it should be a look at the health of the real estate companies in different sectors. I think they meaningfully underperformed the growth of the broader market.
So, while there hasn’t been outright distress, there still is some overhang on real estate values and on real estate liquidity, which is why we’re seeing this opportunity to take advantage of that dynamic — to take businesses that are improperly valued in the public markets and take them private.
And I think pricing in public markets is not picking up on the fact that that real estate markets are recovered. Values are recovering. Performance is good. Yes, rates may be sticky, but fundamentals are pretty good. In most sectors, there’s a structural cap on supply and demand that is good to great, depending on the sector. There’s a lot to like about the environment today — and that’s why we’ve been so active.
Why do you think the public markets haven’t picked that up?
I think to some extent the public markets have priced in a worse scenario than has occurred. A lot of what happens in the world is driven by sentiment, and I think sentiment to the average investor is still a little skeptical on real estate values generally and in real estate recovery. When you live it every day, like us, it’s very easy to see what’s happening on the ground and across our businesses and across our portfolios globally. It’s not as easy to see when you’re thinking about real estate in the context of every other investable instrument or security.
The other part of it is definitely rate driven, and real estate is a more rate-sensitive asset class than many others. I think both of those things combined has kept a little bit of downward pressure on share prices.
I heard a little about your new investor incentive. Could you tell us a bit about that?
Yes, as I mentioned in our asset management business we have multiple fund strategies. One of them is a non-traded REIT. It’s a diversified, income-focused fund, really set up for individual investors. So, it’s really a product for the retail market. Yield focus with diversity.
In that vehicle, we’re doing a soft relaunch and refocus to take advantage of exactly the environment that we were talking about earlier. To incentivize some momentum around that fund, we’re effectively giving bonus shares for new capital coming to that strategy.
How’s the feedback been so far?
It’s early. We just announced this a couple weeks ago. I think it’s really good. I think the performance has to be there for people to see that real estate is back and it’s recovering, and I think we’re just on the front end of most investors — whether they be institutions or individual investors — understanding that the performance is finally there.
How is raising money right now in general?
It’s gotten a lot better. Our last flagship fund that we closed last year was the largest real estate fundraise we ever did. We raised about $18 billion for the global strategy. We’re very lucky to do that.
I would say that is not probably true, or indicative, of the broader market, which is a pretty difficult market. I think it’s improving, but there’s two points we’re hearing from institutional clients generally. First is their desire to do more with less. They have a lot of capital deployed, they have relatively small teams, and they currently have a lot of managers. I think the future will be having less partners and doing more with those partners.
Two, there’s also a real focus on performance and track record. I think they’re having a little more scrutiny around performance and where they allocate capital and how they allocate capital.
Those two things are changing the fundraising dynamic a bit, but on balance some of the largest investors in the world still are under-allocated in real estate, especially with where their equities books have gone.
I want to get your take on office. You did 2.1 million square feet of office leasing right here at Brookfield Place. Can you break that down? You had to move to accommodate Jane Street taking 1 million square feet.
Going back to my earlier commentary on the residential sector, New York office just has supply constraints. We did have a cycle of a meaningful amount of new supply — we contributed to that with our project in Manhattan West — but we’ve absorbed all that. We’ve absorbed it all.
The New York office market — if you’ve good product today — is as tight as it’s ever been. That’s just a fact. The stats show it. And we run into issues where we need to get out of the way for people to take our space — that’s like a high-class problem.
Are you looking to do any new development at all?
Yeah, we’re constantly looking at new opportunities, but, given where costs are and financing costs, it’s really hard to make new development pencil. But, if you could start a building tomorrow in Midtown Manhattan, I think you would fill it. And we’re looking at all of those opportunities.
Where is Brookfield in Los Angeles these days? Are you guys done with it?
Well, you’re talking specifically about office, because we own a lot in Los Angeles. We have a lot of logistics. We own plenty of housing. Look, L.A. is one of the biggest cities in the country. For a business like ours, you don’t ignore markets that are that large.
Our experience on office in L.A. doesn’t totally paint the picture on what we would do and how investable that place is for many of our other sectors — retail, hospitality, logistics and housing — but yeah, for office, we would probably pick better markets where there’s a higher moat of new supply and, frankly, more of a demand tail end — places like New York, places like San Francisco, places like Toronto.
I heard that you guys sold the PGA National Resort and the Mayfair in Miami. Now, you guys bought them, then revamped them, and then sold them.
Buy, fix, sell. I would say our hospitality strategy is typically that. We’ve done that through our fund strategies for quite a long time and have a lot of successful examples of that. But PGA was exactly that: a great resort on a world-class championship golf course that really didn’t have capital invested in it for quite a long time and needed a room renovation, needed the food and beverage rethought and reimagined.
We bought it not knowing that COVID would happen. But South Florida was a big beneficiary of all the demand that obviously came in. Not only in the local market, but also through the growth of golf.
In hospitality, we’re very much focused on the K-shaped recovery today. Luxury and leisure continues to perform really, really well. The highest of the market has been resilient. People continue to want to spend their discretionary income on experiences, and we continue to see that growing on luxury, leisure, resort properties.
Last year we bought the Shangri-La in Vancouver, which was an extremely high-end hotel built with a condo project. We were able to buy it at a really good value at a time when Vancouver tourism, generally Canadian tourism, was pretty down — but Vancouver is specifically concentrated toward an Asian tourist. We bought the hotel. We rebranded the hotel as a Park Hyatt, making it less specific to an Asian tourist customer and more specific to a high-end luxury consumer, revamping the rooms and repositioning that hotel. That’s one strategy.
On the other end in the same fund, we bought one of the best and largest hostel businesses across Europe. It’s called Generator — and it is a really cool business. They built a really great brand across Europe.
We mentioned Danny Meyer’s name before we started. So, what’s his new restaurant for Brookfield?
I can’t say anything.
Max Gross can be reached at mgross@commercialobserver.com.
