Market Overview

GGP Inc. Shareholders Should Push for a Higher, All Cash Deal from Brookfield Property Partners, Says UNITE HERE


UNITE HERE released a report
today questioning whether units in Brookfield Property Partners (NASDAQ: BPY)
are a good trade for GGP Inc. (NYSE: GGP)
shareholders or whether they would be better served not only with a
higher offer, but one that is all cash. BPY's $14.8 billion initial
offer to buy out the remainder of Class A mall REIT GGP is comprised of
half cash and half equity. The equity is in limited partnership units of
BPY, the commercial real estate spin off of Brookfield Asset Management

GGP shareholders certainly should weigh whether BPY's first offer is
adequate. BPY's initial bid is $23 per GGP share, which is a 23%
discount to its own valuation of the shares. The UNITE HERE report,
however, looks beyond the offer and at the BPY units themselves.

"GGP shareholders should not only scrutinize the offer, but also the
equity side of the deal," said Maya Holmes, a research director with
UNITE HERE. "BPY's value could be hindered by its externally advised
structure, BAM's control of the property company, and the myriad related
party transactions and potential for conflicts of interest with BAM. To
avoid any vulnerability from BPY's structure, GGP shareholders should
consider demanding an all-cash offer."

The report raises concerns that Brookfield Asset Management will retain
a significant economic interest in and control over BPY. Brookfield
Asset Management is not restricted from competing with BPY.

GGP shareholders should also scrutinize the fees BAM extracts from BPY,
according to the report. For fiscal years 2014-2016, Brookfield Property
Partners paid BAM affiliates $365.5 million in management fees and
incentive distributions. The management agreement under which BPY pays
these substantial fees "continues in perpetuity" and "may not be
terminated by the BPY General Partner due solely to the poor performance
or the underperformance of any of our operations."

The report asks a key question for GGP shareholders beyond the structure
of BPY: Why exactly would the markets start recognizing the value of
GGP's Class A mall assets under the BPY flag if not under the GGP banner?

Click here
for the report.

UNITE HERE represents 270,000 working people across North America.
Our members are beneficiaries of pension funds with over $60 billion in
assets. Since 2012, we have pursued a program of improving corporate
governance practices at listed companies.

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