10.C. MATERIAL CONTRACTS

The following are the only material contracts, other than contracts entered into in the ordinary course of business, which have been entered into by us in the two years preceding the date of this Form 20-F or prior to that which remain outstanding:


1)	Support Agreement, dated March 19, 2014, between Brookfield Property Partners L.P. and Brookfield Office Properties Exchange LP described under Item 10.B “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”;


2)	Second Amended and Restated Master Services Agreement dated ~~March 3, 2015~~August 27, 2018 by and among Brookfield Asset Management, the Service Recipients and the Service Providers described under Item 7.B. “Major Shareholders and Related Party Transactions - Related Party Transactions - Our Master Services Agreement”;


3)	Relationship Agreement dated April 15, 2013 by and among Brookfield Asset Management, our company and the Service Providers and others described under Item 7.B. “Major Shareholders and Related Party Transactions - Related Party Transactions - Relationship with Brookfield - Relationship Agreement”;


4)	Registration Rights Agreement dated April 10, 2013 between our company and Brookfield Asset Management described under Item 7.B. “Major Shareholders and Related Party Transactions - Related Party Transactions - Relationship with Brookfield - Registration Rights Agreement”;


5)	Second Amended and Restated Limited Partnership Agreement of our partnership dated August 8, 2013 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”;


6)	~~Second~~Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership dated ~~August 8, 2013~~February 20, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”;


7)	~~First Amendment to Second Amended and Restated Limited Partnership Agreement of the Property Partnership dated December 4, 2014 described under Item 10.B.~~ ~~“Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”~~;


8)	Guarantee Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement - Class A Preferred Units”;


9)8)	Investor Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement - Class A Preferred Units”;


~~10)~~9)	Refinancing Agreement by and among our company, the Property Partnership and Brookfield Asset Management dated December 4, 2014 described under Item 7.B. “Major Shareholders and Related Party Transactions - Related Party Transactions - Relationship with Brookfield - Maturity of Class A Preferred Units”; and


~~11)~~	First Amendment to the Amended and Restated Master Services Agreement dated March 3, 2015 by and among Brookfield Asset Management, the Service Recipients and the Service Providers described under Item 7.B. ~~“Major Shareholders and Related Party Transactions - Related Party Transactions - Our Master Services Agreement”~~;


~~12)~~10)	First Amendment to the Second Amended and Restated Limited Partnership Agreement of our partnership dated November 5, 2015 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”; ~~and~~


~~13)~~	~~Second Amendment to Second Amended and Restated Limited Partnership Agreement of the Property Partnership dated July 1, 2015 described under Item 10.B.~~ ~~“Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”~~.

11) Second Amendment to the Second Amended and Restated Limited Partnership Agreement of our partnership dated March 21, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”;

12) Third Amendment to the Second Amended and Restated Limited Partnership Agreement of our partnership dated August 20, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”;

13) Fourth Amendment to the Second Amended and Restated Limited Partnership Agreement of our partnership dated February 18, 2020 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of Our LP Units, Preferred Units and Our Limited Partnership Agreement”;

14) First Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership dated March 21, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”;

15) Second Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership dated April 28, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”;

16) Third Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership dated August 20, 2019 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”; and

17) Fourth Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership dated February 18, 2020 described under Item 10.B. “Additional Information - Memorandum and Articles of Association - Description of the Property Partnership Limited Partnership Agreement”.

Copies of the agreements noted above are available, free of charge, from the BPY General Partner and are available electronically on the website of the SEC at www.sec.gov and on our SEDAR profile at www.sedar.com . Written requests for such documents should be directed to our Corporate Secretary at 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda.

10.D. EXCHANGE CONTROLS

There are currently no governmental laws, decrees, regulations or other legislation of Bermuda which restrict the import or export of capital or the remittance of dividends, interest or other payments to non-residents of Bermuda holding our units.

10.E. TAXATION

The following summary discusses certain material U.S. and Canadian tax considerations related to the holding and disposition of our units as of the date hereof. Prospective purchasers of our units are advised to consult their own tax advisers concerning the consequences under the tax laws of the country of which they are resident or in which they are otherwise subject to tax of making an investment in our units.

U.S. Tax Considerations

This summary discusses certain material U.S. federal income tax considerations to our unitholders relating to the receipt, holding and disposition of our units as of the date hereof. This summary is based on provisions of the U.S. Internal Revenue Code, on the regulations promulgated thereunder ~~or the U.S.~~(the “U.S. Treasury ~~Regulations,~~Regulations”) and on published administrative rulings, judicial decisions, and other applicable authorities, all as in effect on the date hereof and all of which are subject to change at any time, possibly with retroactive effect. This summary is necessarily general and may not apply to all categories of investors, some of whom may be subject to special rules, including, without limitation, persons that own (directly, indirectly or ~~indirectly,~~constructively, applying certain attribution rules) 5% or more of our units, dealers in securities or currencies, financial institutions or financial services entities, mutual funds, life insurance companies, persons that hold our units as part of a straddle, hedge, constructive sale or conversion transaction with other investments, persons whose units are loaned to a short seller to cover a short sale of units, persons whose functional currency is not the U.S. Dollar, persons who have elected mark-to-market accounting, persons who hold our units through a partnership or other entity treated as a pass-through entity for U.S. federal income tax purposes, persons for whom our units are not a capital asset, persons who are liable for the alternative minimum tax and certain U.S. expatriates or former long-term residents of the United States. This summary does not address any tax consequences to holders of preferred units. Tax-exempt organizations are addressed separately below. The actual tax consequences of the ownership and disposition of our units will vary depending on your individual circumstances.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of one or more of our units that is for U.S. federal tax purposes: (i) an individual citizen or resident of the United States; (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust (a) that is subject to the primary supervision of a court within the United States and all substantial decisions of which one or more U.S. persons have the authority to control or (b) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

A “Non-U.S. Holder” is a beneficial owner of one or more of our units, other than a U.S. Holder or an entity classified as a partnership or other fiscally transparent entity for U.S. federal tax purposes.

If a partnership holds our units, the tax treatment of a partner of such partnership generally will depend upon the status of the partner and the activities of our company. Partners of partnerships that hold our units should consult their own tax advisers.

This discussion does not constitute tax advice and is not intended to be a substitute for tax planning. You should consult your own tax adviser concerning the U.S. federal, state and local income tax consequences particular to your ownership and disposition of our units, as well as any tax consequences under the laws of any other taxing jurisdiction.

Partnership Status of Our Company and the Property Partnership

Each of our company and the Property Partnership has made a protective election to be classified as a partnership for U.S. federal tax purposes. An entity that is treated as a partnership for U.S. federal tax purposes, generally incurs no U.S. federal income tax liability. Instead, each partner is required to take into account its allocable share of items of income, gain, loss, deduction, or credit of our company in computing its U.S. federal income tax liability, regardless of whether cash distributions are made. Distributions of cash by a partnership to a partner generally are not taxable unless the amount of cash distributed to a partner is in excess of the partner’s adjusted basis in its partnership interest.

An entity that would otherwise be classified as a partnership for U.S. federal income tax purposes may nonetheless be taxable as a corporation if it is a “publicly traded partnership”, unless an exception applies. Our company is publicly traded. However, an exception, referred to as the “Qualifying Income Exception”, exists with respect to a publicly traded partnership if (i) at least 90% of such partnership’s gross income for every taxable year consists of “qualifying income” and (ii) the partnership would not be required to register under the Investment Company Act if it were a U.S. corporation. Qualifying income includes certain interest income, dividends, real property rents, gains from the sale or other disposition of real property, and any gain from the sale or disposition of a capital asset or other property held for the production of income that otherwise constitutes qualifying income.

The BPY General Partner intends to manage the affairs of our company and the Property Partnership so that our company will meet the Qualifying Income Exception in each taxable year. Accordingly, the BPY General Partner believes that our company will be treated as a partnership and not as a corporation for U.S. federal income tax purposes.

If our company fails to meet the Qualifying Income Exception, other than a failure which is determined by the IRS to be inadvertent and which is cured within a reasonable time after discovery, or if our company is required to register under the

Investment Company Act, our company will be treated as if it had transferred all of its assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which our company fails to meet the Qualifying Income Exception, in return for stock in such corporation, and then distributed the stock to our unitholders in liquidation. This deemed contribution and liquidation could result in the recognition of gain (but not loss) to U.S. Holders, except that U.S. Holders generally would not recognize the portion of such gain attributable to stock or securities of non-U.S. corporations held by us. If, at the time of such contribution, our company were to have liabilities in excess of the tax basis of its assets, U.S. Holders generally would recognize gain in respect of such excess liabilities upon the deemed transfer. Thereafter, our company would be treated as a corporation for U.S. federal income tax purposes.

If our company were treated as a corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, our company’s items of income, gain, loss, deduction, or credit would be reflected only on our company’s tax return rather than being passed through to our unitholders, and our company would be subject to U.S. corporate income tax and potentially branch profits tax with respect to its income, if any, effectively connected with a U.S. trade or business. Moreover, under certain circumstances, our company might be classified as a PFIC, for U.S. federal income tax purposes, and a U.S. Holder would be subject to the rules applicable to PFICs discussed below. See “- Consequences to U.S. Holders - Passive Foreign Investment Companies”. Subject to the PFIC rules, distributions made to U.S. Holders would be treated as taxable dividend income to the extent of our company’s current or accumulated earnings and profits. Any distribution in excess of current and accumulated earnings and profits would first be treated as a tax-free return of capital to the extent of a U.S. Holder’s adjusted tax basis in its units. Thereafter, to the extent such distribution ~~was~~were to exceed a U.S. Holder’s adjusted tax basis in its units, the distribution would be treated as gain from the sale or exchange of such units. The amount of a distribution treated as a dividend could be eligible for reduced rates of taxation, provided certain conditions are met. In addition, dividends, interest and certain other passive income received by our company with respect to U.S. investments generally would be subject to U.S. withholding tax at a rate of 30% (although certain Non-U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of their allocable share of such income) and U.S. Holders would not be allowed a tax credit with respect to any such tax withheld. In addition, the “portfolio interest” exemption would not apply to certain interest income of our company (although certain ~~Non-U.S.~~Non-

U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of their allocable share of such income).

Depending on the circumstances, additional adverse U.S. federal income tax consequences could result under the anti-inversion rules described in Section 7874 of the U.S. Internal Revenue Code, the U.S. Treasury Regulations under Section 385 of the U.S. Internal Revenue Code, or other provisions of the U.S. Internal Revenue Code, as implemented by the U.S. Treasury Regulations and IRS administrative guidance. Based on the foregoing consequences, the treatment of our company as a corporation could materially reduce a holder’s after-tax return and therefore could result in a substantial reduction of the value of our units. If the Property Partnership were to be treated as a corporation for U.S. federal income tax purposes, consequences similar to those described above would apply, and additional adverse U.S. federal income tax consequences could result if debt issued by a U.S. subsidiary to the Property Partnership were recharacterized as equity under the U.S. Treasury Regulations under Section 385 of the U.S. Internal Revenue Code.apply.

The remainder of this summary assumes that our company and the Property Partnership will be treated as partnerships for U.S. federal tax purposes. We expect that a substantial portion of the items of income, gain, deduction, loss, or credit realized by our company will be realized in the first instance by the Property Partnership and allocated to our company for reallocation to our unitholders. Unless otherwise specified, references in this section to realization of our company’s items of income, gain, loss, deduction, or credit include a realization of such items by the Property Partnership (or other lower tier partnership) and the allocation of such items to our company.

Consequences to U.S. Holders

Holding of Our Units

Income and Loss. If you are a U.S. Holder, you will be required to take into account, as described below, your allocable share of our company’s items of income, gain, loss, deduction, and credit for each of our company’s taxable years ending with or within your taxable year. Each item generally will have the same character and source as though you had realized the item directly. You must report such items without regard to whether any distribution has been or will be received from our company. Our company intends to make cash distributions to all of our unitholders on a quarterly basis in amounts generally expected to be sufficient to permit U.S. Holders to fund their estimated U.S. tax obligations (including U.S. federal, state, and local income taxes) with respect to their allocable shares of our company’s net income or gain. However, based upon your particular tax situation and simplifying assumptions that our company will make in determining the amount of such distributions, and depending upon whether you elect to reinvest such distributions pursuant to the distribution reinvestment plan, if available, your tax liability might exceed cash distributions made to you, in which case any tax liabilities arising from your ownership of our units would need to be satisfied from your own funds.

With respect to U.S. Holders who are individuals, certain dividends paid by a corporation (including certain qualified foreign corporations) to our company and that are allocable to such U.S. Holders may qualify for reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of specified income tax treaties with

the United States. In addition, a foreign corporation is treated as a qualified corporation with respect to its shares that are readily tradable on an established securities market in the United States. Among other exceptions, U.S. Holders who are individuals will not be eligible for reduced rates of taxation on any dividends if the payer is a PFIC for the taxable year in which such dividends are paid or for the preceding taxable year. Nor will such reduced rates of taxation generally apply to dividends paid by a REIT. Dividends received by non-corporate U.S. Holders may be subject to an additional Medicare tax on unearned income of 3.8% (see “-Medicare Tax” below). U.S. Holders that are corporations generally will not be entitled to a “dividends received deduction” in respect of dividends paid by non-U.S. corporations or REITs in which our company (through the Property Partnership) owns stock. You should consult your own tax adviser regarding the application of the foregoing rules in light of your particular circumstances.

For U.S. federal income tax purposes, your allocable share of our company’s items of income, gain, loss, deduction, or credit will be governed by our limited partnership agreement if such allocations have “substantial economic effect” or are determined to be in accordance with your interest in our company. Similarly, our company’s allocable share of items of income, gain, loss, deduction, or credit of the Property Partnership will be governed by the limited partnership agreement of the Property Partnership if such allocations have “substantial economic effect” or are determined to be in accordance with our interest in the Property Partnership. The BPY General Partner believes that, for U.S. federal income tax purposes, such allocations should be given effect, and the BPY General Partner intends to prepare and file tax returns based on such allocations. If the IRS were to successfully challenge the allocations made pursuant to either our company’s limited partnership agreement or the limited partnership agreement of the Property Partnership, then the resulting allocations for U.S. federal income tax purposes might be less favorable than the allocations set forth in such agreements.

Basis. ~~You~~In general, you will have an initial tax basis in your units equal to the sum of (i) the amount of cash paid for our units ~~(or, if you received your units pursuant to the Spin-off, their fair market value on the date you received them pursuant to the Spin-off)~~ and (ii) your share of our company’s liabilities, if any. That basis will be increased by your share of our company’s income and by increases in your share of our company’s liabilities, if any. That basis will be decreased, but not below zero, by distributions you receive from our company, by your share of our company’s losses, and by any decrease in your share of our company’s

liabilities. Under applicable U.S. federal income tax rules, a partner in a partnership has a single, or “unitary”, tax basis in his or her partnership interest. As a result, any amount you pay to acquire additional units (including through the distribution reinvestment plan) will be averaged with the adjusted tax basis of units owned by you prior to the acquisition of such additional units.

For purposes of the foregoing rules, the rules discussed immediately below, and the rules applicable to a sale or exchange of our units, our company’s liabilities generally will include our company’s share of any liabilities of the Property Partnership.

Limits on Deductions for Losses and Expenses. Your deduction of your allocable share of our company’s losses will be limited to your tax basis in our units and, if you are an individual or a corporate holder that is subject to the “at risk” rules, to the amount for which you are considered to be “at risk” with respect to our company’s activities, if that is less than your tax basis. In general, you will be at risk to the extent of your tax basis in our units, reduced by (i) the portion of that basis attributable to your share of our company’s liabilities for which you will not be personally liable (excluding certain qualified non-recourse financing) and (ii) any amount of money you borrow to acquire or hold our units, if the lender of those borrowed funds owns an interest in our company, is related to you, or can look only to your units for repayment. Your at-risk amount generally will increase by your allocable share of our company’s income and gain and decrease by distributions you receive from our company and your allocable share of losses and deductions. You must recapture losses deducted in previous years to the extent that distributions cause your at-risk amount to be less than zero at the end of any taxable year. Losses disallowed or recaptured as a result of these limitations will carry forward and will be allowable to the extent that your tax basis or at-risk amount, whichever is the limiting factor, subsequently increases. Upon the taxable disposition of our units, any gain recognized by you can be offset by losses that were previously suspended by the at-risk limitation, but may not be offset by losses suspended by the basis limitation. Any excess loss above the gain previously suspended by the at-risk or basis limitations may no longer be used. Under the Tax Cuts and Jobs Act, non-corporate taxpayers are not permitted to deduct “excess business losses” for taxable years beginning after December 31, 2017, and before January 1, 2026. You should consult your own tax adviser regarding the limitations on the deductibility of losses under the U.S. Internal Revenue Code.

Limitations on Deductibility of Organizational Expenses and Syndication Fees. In general, neither our company nor any U.S. Holder may deduct organizational or syndication expenses. Similar rules apply to organizational or syndication expenses incurred by the Property Partnership. Syndication fees (which would include any sales or placement fees or commissions) must be capitalized and cannot be amortized or otherwise deducted.

Limitations on Interest Deductions. Your share of our company’s interest expense, if any, is likely to be treated as “investment interest” expense. For a non-corporate U.S. Holder, the deductibility of “investment interest” expense generally is limited to the amount of such holder’s “net investment income”. Net investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less deductible expenses, other than interest,

directly connected with the production of investment income, but generally does not include gains attributable to the disposition of property held for investment. Your share of our company’s dividend and interest income will be treated as investment income, although “qualified dividend income” subject to reduced rates of tax in the hands of an individual will only be treated as investment income if such individual elects to treat such dividend as ordinary income not subject to reduced rates of tax. In addition, state and local tax laws may disallow deductions for your share of our company’s interest expense. Under Section 163(j) of the U.S. Internal Revenue Code, ~~as amended by the Tax Cuts and Jobs Act,~~ additional limitations may apply to a corporate U.S. Holder’s share of our company’s interest expense, if any.

Deductibility of Partnership Investment Expenditures by Individual Partners and by Trusts and Estates. Under the Tax Cuts and Jobs Act, individuals and certain estates and trusts will not be permitted to claim miscellaneous itemized deductions for taxable years beginning after December 31, 2017, and before January 1, 2026. Such miscellaneous itemized deductions may include the operating expenses of our company, including our company’s allocable share of the base management fee or any other management fees.

Treatment of Distributions

Distributions of cash by our company generally will not be taxable to you to the extent of your adjusted tax basis (described above) in our units. Any cash distributions in excess of your adjusted tax basis generally will be considered to be gain from the sale or exchange of our units (described below). Such gain generally will be treated as capital gain and will be long-term capital gain if your holding period for our units exceeds one year. A reduction in your allocable share of our liabilities, and certain distributions of marketable securities by our company, if any, will be treated similar to cash distributions for U.S. federal income tax purposes.

Sale or Exchange of Our Units

You will recognize gain or loss on the sale or taxable exchange of our units equal to the difference, if any, between the amount realized and your tax basis in our units sold or exchanged. Your amount realized will be measured by the sum of the cash or the fair market value of other property received plus your share of our company’s liabilities, if any.

Gain or loss recognized by you upon the sale or exchange of our units generally will be taxable as capital gain or loss and will be long-term capital gain or loss if our units were held for more than one year as of the date of such sale or exchange. Assuming you have not elected to treat your share of our company’s investment in any PFIC as a “qualified electing fund”, gain attributable to such investment in a PFIC would be taxable in the manner described below in “-Passive Foreign Investment Companies”. In addition, certain gain attributable to our investment in a CFC may be characterized as ordinary income, and certain gain attributable to “unrealized receivables” or “inventory items” could be characterized as ordinary income rather than capital gain. For example, if our company were to hold debt acquired at a market discount, accrued market discount on such debt would be treated as “unrealized receivables”. The deductibility of capital losses is subject to limitations.

Each U.S. Holder who acquires our units at different times and intends to sell all or a portion of our units within a year of the most recent purchase should consult its own tax adviser regarding the application of certain “split holding period” rules to such sale and the treatment of any gain or loss as long-term or short-term capital gain or loss.

Medicare Tax

U.S. Holders that are individuals, estates, or trusts may be required to pay a 3.8% Medicare tax on the lesser of (i) the excess of such U.S. Holders’ “modified adjusted gross income” (or “adjusted gross income” in the case of estates and trusts) over certain thresholds and (ii) such U.S. Holders’ “net investment income” (or “undistributed net investment income” in the case of estates and trusts). Net investment income generally includes your allocable share of our company’s income, as well as gain realized by you from a sale of our units. Special rules relating to the 3.8% Medicare tax may apply to dividends and gain, if any, derived by U.S. Holders with respect to our company’s interest in a PFIC or CFC. See “- Consequences to U.S. Holders - Passive Foreign Investment Companies” and “- Consequences to U.S. Holders - Controlled Foreign Corporations”. U.S. Holders should consult their own tax advisers regarding the implications of the 3.8% Medicare tax for the ownership and disposition of our units.

Foreign Tax Credit Limitations

If you are a U.S. Holder, you generally will be entitled to a foreign tax credit with respect to your allocable share of creditable foreign taxes paid on our company’s income and gain. Complex rules may, depending on your particular circumstances, limit the availability or use of foreign tax credits. Gain from the sale of our company’s investments may be treated as U.S.-source gain. Consequently, you may not be able to use the foreign tax credit arising from any foreign taxes imposed on such gain unless

the credit can be applied (subject to applicable limitations) against U.S. tax due on other income treated as derived from foreign sources. Certain losses that our company incurs may be treated as foreign-source losses, which could reduce the amount of foreign tax credits otherwise available.

Deduction for Qualified Business Income

Under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, and before January 1, 2026, U.S. taxpayers who have domestic “qualified business income” from a partnership generally are entitled to deduct the lesser of such qualified business income or 20% of taxable income. The 20% deduction is also allowed for “qualified publicly traded partnership income” and “qualified REIT dividends”. A U.S. Holder’s allocable share of our company’s income is not expected to be treated as qualified business income or as qualified publicly traded partnership income. However, a non-corporate U.S. Holder’s allocable share of ordinary dividends from a REIT may qualify as “qualified REIT dividends” eligible for the 20% deduction. You should consult your own tax adviser regarding the implications of the foregoing rules for an investment in our units.

Section 754 Election

Our company and the Property Partnership have each made the election permitted by Section 754 of the U.S. Internal Revenue Code ~~or the Section~~(the “Section 754 ~~Election.~~Election”). The Section 754 Election cannot be revoked without the consent of the IRS. The Section 754 Election generally requires our company to adjust the tax basis in its assets, or inside basis, attributable to a transferee of our units under Section 743(b) of the U.S. Internal Revenue Code to reflect the purchase price paid by the transferee for our units. This election does not apply to a person who purchases units directly from us. For purposes of this discussion, a transferee’s inside basis in our company’s assets will be considered to have two components: (i) the transferee’s share of our company’s tax

basis in our company’s assets, or common basis, and (ii) the adjustment under Section 743(b) of the U.S. Internal Revenue Code to that basis. The foregoing rules would also apply to the Property Partnership.

Generally, a Section 754 Election would be advantageous to a transferee U.S. Holder if such holder’s tax basis in its units were higher than such units’ share of the aggregate tax basis of our company’s assets immediately prior to the transfer. In that case, as a result of the Section 754 Election, the transferee U.S. Holder would have a higher tax basis in its share of our company’s assets for purposes of calculating, among other items, such holder’s share of any gain or loss on a sale of our company’s assets. Conversely, a Section 754 Election would be disadvantageous to a transferee U.S. Holder if such holder’s tax basis in its units were lower than such units’ share of the aggregate tax basis of our company’s assets immediately prior to the transfer. Thus, the fair market value of our units may be affected either favorably or adversely by the election.

Whether or not the Section 754 Election is made, if our units are transferred at a time when our company has a “substantial built-in loss” in its assets, our company will be obligated to reduce the tax basis in the portion of such assets attributable to such units.

The calculations involved in the Section 754 Election are complex, and the BPY General Partner advises that it will make such calculations on the basis of assumptions as to the value of our company’s assets and other matters. Each U.S. Holder should consult its own tax adviser as to the effects of the Section 754 Election.

Uniformity of Our Units

Because we cannot match transferors and transferees of our units, we must maintain the uniformity of the economic and tax characteristics of our units to a purchaser of our units. In the absence of uniformity, we may be unable to comply fully with a number of U.S. federal income tax requirements. A lack of uniformity can result from a literal application of certain U.S. Treasury Regulations to our company’s Section 743(b) adjustments, a determination that our company’s Section 704(c) allocations are unreasonable, or other reasons. Section 704(c) allocations would be intended to reduce or eliminate the disparity between tax basis and the value of our company’s assets in certain circumstances, including on the issuance of additional units. In order to maintain the fungibility of all of our units at all times, we will seek to achieve the uniformity of U.S. tax treatment for all purchasers of our units which are acquired at the same time and price (irrespective of the identity of the particular seller of our units or the time when our units are issued by our company), through the application of certain tax accounting principles that the BPY General Partner believes are reasonable for our company. However, the IRS may disagree with us and may successfully challenge our application of such tax accounting principles. Any non-uniformity could have a negative impact on the value of our units.

Foreign Currency Gain or Loss

Our company’s functional currency is the U.S. Dollar, and our company’s income or loss is calculated in U.S. Dollars. It is likely that our company will recognize “foreign currency” gain or loss with respect to transactions involving non-U.S. Dollar currencies. In general, foreign currency gain or loss is treated as ordinary income or loss. You should consult your own tax adviser regarding the tax treatment of foreign currency gain or loss.

Passive Foreign Investment Companies

U.S. Holders may be subject to special rules applicable to indirect investments in foreign corporations, including an investment through our company in a PFIC. A PFIC is defined as any foreign corporation with respect to which (after applying certain look-through rules) either (i) 75% or more of its gross income for a taxable year is “passive income” or (ii) 50% or more of its assets in any taxable year (generally based on the quarterly average of the value of its assets) produce or are held for the production of “passive income”. There are no minimum stock ownership requirements for PFICs. If you hold an interest in a foreign corporation for any taxable year during which the corporation is classified as a PFIC with respect to you, then the corporation will continue to be classified as a PFIC with respect to you for any subsequent taxable year during which you continue to hold an interest in the corporation, even if the corporation’s income or assets would not cause it to be a PFIC in such subsequent taxable year, unless an exception applies.

Subject to certain elections described below, any gain on the disposition of stock of a PFIC owned by you indirectly through our company, as well as income realized on certain “excess distributions” by such PFIC, would be treated as though realized ratably over the shorter of your holding period of our units or our company’s holding period for the PFIC. Such gain or income generally would be taxable as ordinary income, and dividends paid by the PFIC would not be eligible for the preferential tax rates for dividends paid to non-corporate U.S. Holders. In addition, an interest charge would apply, based on the tax deemed deferred from prior years.

If you were to elect to treat your share of our company’s interest in a PFIC as a “qualified electing fund”, such election a “QEF Election”, for the first year you were treated as holding such interest, then in lieu of the tax consequences described in the paragraph immediately above, you would be required to include in income each year a portion of the ordinary earnings and net capital gains of the PFIC, even if not distributed to our company or to you. A QEF Election must be made by you on an entity-by-entity basis. To make a QEF Election, you must, among other things, (i) obtain a PFIC annual information statement (through an intermediary statement supplied by our company) and (ii) prepare and submit IRS Form 8621 with your annual income tax return. To the extent reasonably practicable, we intend to timely provide you with information related to the PFIC status of each entity we are able to identify as a PFIC, including information necessary to make a QEF Election with respect to each such entity. Any such election should be made for the first year our company holds an interest in such entity or for the first year in which you hold our units, if later. Under certain circumstances, we may be permitted to make a QEF Election on behalf of all U.S. Holders with respect to a PFIC held indirectly. However, no assurance can be provided that we will make any such QEF Election, if available.

Once you have made a QEF Election for an entity, such election applies to any additional shares of interest in such entity acquired directly or indirectly, including through additional units acquired after the QEF Election is made (such as units acquired under the distribution reinvestment plan, if available). If you were to make a QEF Election after the first year that you were treated as holding an interest in a PFIC, the adverse tax consequences relating to PFIC stock would continue to apply with respect to the pre-QEF Election period, unless you were to make a “purging election”. The purging election would create a deemed sale of your previously held share of our company’s interests in a PFIC. The gain recognized by the purging election would be subject to the special tax and interest charge rules, which treat the gain as an excess distribution, as described above. As a result of the purging election, you would have a new basis and holding period in your share of our company’s interests in the PFIC. U.S. Holders should consult their own tax advisers as to the manner in which such direct inclusions could affect their allocable share of our company’s income and their tax basis in our units and the advisability of making a QEF Election or a purging election.

U.S. Treasury Regulations under Section 1411 of the U.S. Internal Revenue Code contain special rules for applying the 3.8% Medicare tax (as described above under “- Medicare Tax”) to U.S. persons owning an interest in a PFIC. Under the special rules, if you are a non-corporate U.S. Holder that has made a QEF Election with respect to our company’s interest in a PFIC, then you are permitted to make a special election to treat your share of the ordinary earnings and net capital gains of the PFIC as net investment income for purposes of the 3.8% Medicare tax. If you do not make the special election, you may be required to calculate your basis in our units for purposes of the 3.8% Medicare tax in a manner that differs from the calculation of your basis in our units for U.S. federal income tax purposes generally. You should consult your own tax adviser regarding the implications of the

special election, as well as the other implications of the 3.8% Medicare tax and the U.S. Treasury Regulations under Section 1411 of the U.S. Internal Revenue Code for your ownership and disposition of our units.

In the case of a PFIC that is a publicly traded foreign company, and in lieu of making a QEF Election, an election may be made to “mark to market” the stock of such publicly traded foreign company on an annual basis. Pursuant to such an election, you would include in each year as ordinary income the excess, if any, of the fair market value of such stock over its adjusted basis at the end of the taxable year. No assurance can be provided that any of our existing or future Holding Entities or operating entities will qualify as PFICs that are publicly traded or that a mark-to-market election will be available for any such entity. You should consult your own tax adviser regarding the availability of the mark-to-market election with respect to any PFIC in which you are treated as owning an interest through our company.

Based on our organizational structure, as well as our company’s expected income and assets, the BPY General Partner currently believes that one or more of our existing Holding Entities and operating entities are likely to be classified as PFICs. Moreover, we may in the future acquire certain investments or operating entities through one or more Holding Entities treated as corporations for U.S. federal income tax purposes, and such future Holding Entities or other companies in which we acquire an interest may be treated as PFICs. In addition, in order to ensure that we satisfy the Qualifying Income Exception, among other reasons, we may decide to hold an existing or future operating entity through a Holding Entity that would be classified as a PFIC. See “-Investment Structure” below.

Subject to certain exceptions, a U.S. person who directly or indirectly owns an interest in a PFIC generally is required to file an annual report with the IRS, and the failure to file such report could result in the imposition of penalties on such U.S. person and in the extension of the statute of limitations with respect to federal income tax returns filed by such U.S. person. The application of the PFIC rules to U.S. Holders is uncertain in certain respects, and the PFIC rules remain subject to recently proposed U.S. Treasury Regulations yet to be made final. You should consult your own tax adviser regarding the PFIC rules, including the foregoing filing requirements and the recently proposed U.S. Treasury Regulations, as well as the advisability of making a QEF Election, a special election under the U.S. Treasury Regulations under Section 1411 of the U.S. Internal Revenue Code, or a mark-to-market election, as applicable, with respect to any PFIC in which you are treated as owning an interest through our company.

Controlled Foreign Corporations

A non-U.S. entity will be treated as a CFC if it is treated as a corporation for U.S. federal income tax purposes and more than 50% of (i) the total combined voting power of all classes of stock of the non-U.S. entity entitled to vote or (ii) the total value of the stock of the non-U.S. entity is owned by U.S. Shareholders on any day during the taxable year of such non-U.S. entity. For this purpose, a “U.S. Shareholder” with respect to a non-U.S. entity means a U.S. person (including a U.S. partnership) that owns (directly, indirectly or constructively) 10% or more of the total combined voting power of all classes of stock of the non-U.S. entity entitled to vote or 10% or more of the total value of shares of all classes of stock of the non-U.S. entity.

If a U.S. partnership in which we own an interest is a U.S. Shareholder of a CFC, then a U.S. Holder may be required to include in income its allocable share of the CFC’s “Subpart F” income. Subpart F income generally includes dividends, interest, net gain from the sale or disposition of securities, non-actively managed rents, and certain other generally passive types of income. The aggregate Subpart F income inclusions in any taxable year relating to a particular CFC are limited to such CFC’s current earnings and profits. Under the Tax Cuts and Jobs Act, a U.S. Holder may also be required to include in income its allocable share of the CFC’s “global intangible low-taxed income”, or GILT income. Each of the foregoingSuch inclusions will be treated as ordinary income (whether or not such inclusions are attributable to net capital gains). Thus, a U.S. Holder may be required to report as ordinary income its allocable share of the CFC’s Subpart F income ~~and GILT income~~ without corresponding receipts of cash and may not benefit from capital gain treatment with respect to the portion of any earnings attributable to net capital gains of the CFC. Corporate U.S. Holders are urged to consult their own tax advisers regarding the availability of a deduction under Section 250 of the U.S. Internal Revenue Code with respect to GILT income inclusions arising from their indirect interest in a CFC through our company.

Your tax basis in your units will be increased to reflect any required Subpart F ~~or GILT income inclusions.~~income. Such income will be treated as income from sources within the United States, for certain foreign tax credit purposes, to the extent derived by the CFC from U.S. sources. Subpart F income ~~(and likely GILT income)~~ will not be eligible for the reduced rate of tax applicable to certain dividends paid by qualified foreign corporations to individual U.S. persons. See above under “- Consequences to U.S. Holders - Holding of Our Units - Income and Loss”. Amounts included as Subpart F income ~~or GILT income~~ with respect to direct and indirect investments generally will not be taxable again when actually distributed by the CFC.

Whether or not any CFC has Subpart F ~~income or GILT~~ income, any gain allocated to you from our disposition of an equity interest in a CFC will be treated as dividend income to the extent of your allocable share of the current and/or accumulated

earnings and profits of the CFC. In this regard, earnings would not include any amounts previously taxed pursuant to the CFC rules. However, net losses (if any) of a CFC will not pass through to U.S. Holders.

As described above under “- Consequences to U.S. Holders - Passive Foreign Investment Companies”, U.S. Treasury Regulations under Section 1411 of the U.S. Internal Revenue Code contain special rules for applying the 3.8% Medicare tax to U.S. persons owning an interest in a PFIC. Similar rules apply to U.S. Shareholders of a CFC. You should consult your own tax adviser regarding the implications of these special rules.

If a non-U.S. entity held by us through a U.S. partnership (treated as a U.S. Shareholder of such non-U.S. entity) is classified as both a CFC and a PFIC, then you will be required to include amounts in income with respect to such non-U.S. entity either under the CFC rules described under this subheading, or under the PFIC rules described under “- Consequences to U.S. Holders - Passive Foreign Investment Companies”, but not both. The interaction of these rules is complex, and you should consult your own tax adviser in this regard.

Based on our organizational structure, the BPY General Partner currently believes that one or more of our existing Holding Entities and operating entities are likely to be classified as CFCs. Moreover, we may in the future acquire certain investments or operating entities through one or more Holding Entities treated as corporations for U.S. federal income tax purposes, and such future Holding Entities or other companies in which we acquire an interest may be treated as CFCs. ~~As a result of the Tax Cuts and Jobs Act, the~~The application of the CFC rules to U.S. Holders is uncertain in certain respects, and the ~~amended~~ CFC rules, as amended by the Tax Cuts and Jobs Act, remain subject to ~~regulations or~~proposed U.S. Treasury Regulations yet to be made final, as well as other guidance yet to be issued. Specifically, under recently proposed U.S. Treasury Regulations on which we may be permitted to rely, only U.S. Holders that are U.S. Shareholders would be required to include in income their allocable shares of a CFC’s Subpart F income. You should consult your own tax adviser regarding the implications of the CFC rules for your ownership and disposition of our units.

Investment Structure

To ensure that our company meets the Qualifying Income Exception for publicly traded partnerships (discussed above) and complies with certain requirements in its limited partnership agreement, among other reasons, we may structure certain investments through an entity classified as a corporation for U.S. federal income tax purposes. Such investments will be structured as determined in the sole discretion of the BPY General Partner generally to be efficient for our unitholders. However, because our unitholders will be located in numerous taxing jurisdictions, no assurance can be given that any such investment structure will

benefit all our unitholders to the same extent, and such an investment structure might even result in additional tax burdens on some unitholders. As discussed above, if any such entity were a non-U.S. corporation, it might be considered a PFIC or CFC. If any such entity were a U.S. corporation, it would be subject to U.S. federal net income tax on its income, including any gain recognized on the disposition of its investments. In addition, if the investment were to involve U.S. real property, gain recognized on the disposition of the investment by a corporation generally would be subject to corporate level tax, whether the corporation were a U.S. or a non-U.S. corporation.

U.S. Withholding Taxes

Although each U.S. Holder is required to provide us with an IRS Form W-9, we nevertheless may be unable to accurately or timely determine the tax status of our unitholders for purposes of determining whether U.S. withholding applies to payments made by our company to some or all of our unitholders. In such a case, payments made by our company to U.S. Holders might be subject to U.S. “backup” withholding at the applicable rate or other U.S. withholding taxes. You would be able to treat as a credit your allocable share of any U.S. withholding taxes paid in the taxable year in which such withholding taxes were paid and, as a result, you might be entitled to a refund of such taxes from the IRS. In the event you transfer or otherwise dispose of some or all of your units, special rules might apply for purposes of determining whether you or the transferee of such units were subject to U.S. withholding taxes in respect of income allocable to, or distributions made on account of, such units or entitled to refunds of any such taxes withheld. See below “Administrative Matters-Certain Effects of a Transfer of Units”. You should consult your own tax adviser regarding the treatment of U.S. withholding taxes.

Transferor/Transferee Allocations

Our company may allocate items of income, gain, loss, and deduction using a monthly convention, whereby any such items recognized in a given month by our company are allocated to our unitholders as of a specified date of such month. As a result, if you transfer your units, you might be allocated income, gain, loss, and deduction realized by our company after the date of the transfer. Similarly, if you acquire additional units, you might be allocated income, gain, loss, and deduction realized by our company prior to your ownership of such units.

Section 706 of the U.S. Internal Revenue Code generally governs allocations of items of partnership income and deductions between transferors and transferees of partnership interests, and the U.S. Treasury Regulations provide a safe harbor allowing a

publicly traded partnership to use a monthly simplifying convention for such purposes. However, it is not clear that our company’s allocation method complies with the requirements. If our company’s convention were not permitted, the IRS might contend that our company’s taxable income or losses must be reallocated among our unitholders. If such a contention were sustained, your tax liabilities might be adjusted to your detriment. The BPY General Partner is authorized to revise our company’s method of allocation between transferors and transferees (as well as among investors whose interests otherwise vary during a taxable period).

U.S. Federal Estate Tax Consequences

If our units are included in the gross estate of a U.S. citizen or resident for U.S. federal estate tax purposes, then a U.S. federal estate tax might be payable in connection with the death of such person. Individual U.S. Holders should consult their own tax advisers concerning the potential U.S. federal estate tax consequences with respect to our units.

Certain Reporting Requirements

A U.S. Holder who invests more than $100,000 in our company may be required to file IRS Form 8865 reporting the investment with such U.S. Holder’s U.S. federal income tax return for the year that includes the date of the investment. You may be subject to substantial penalties if you fail to comply with this and other information reporting requirements with respect to an investment in our units. You should consult your own tax adviser regarding such reporting requirements.

U.S. Taxation of Tax-Exempt U.S. Holders of Our Units

Income recognized by a U.S. tax-exempt organization is exempt from U.S. federal income tax except to the extent of the organization’s UBTI. UBTI is defined generally as any gross income derived by a tax-exempt organization from an unrelated trade or business that it regularly carries on, less the deductions directly connected with that trade or business. In addition, income arising from a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) that holds operating assets or is otherwise engaged in a trade or business generally will constitute UBTI. Notwithstanding the foregoing, UBTI generally does not include any dividend income, interest income, certain other categories of passive income, or capital gains realized by a tax-exempt organization, so long as such income is not “debt-financed”, as discussed below. The BPY General Partner currently

believes that our company should not be regarded as engaged in a trade or business, and anticipates that any operating assets held by our company will be held through entities that are treated as corporations for U.S. federal income tax purposes.

The exclusion from UBTI does not apply to income from “debt-financed property”, which is treated as UBTI to the extent of the percentage of such income that the average acquisition indebtedness with respect to the property bears to the average tax basis of the property for the taxable year. If an entity treated as a partnership for U.S. federal income tax purposes incurs acquisition indebtedness, a tax-exempt partner in such partnership will be deemed to have acquisition indebtedness equal to its allocable portion of such acquisition indebtedness. If any such indebtedness were used by our company or by the Property Partnership to acquire property, such property generally would constitute debt-financed property, and any income from or gain from the disposition of such debt-financed property allocated to a tax-exempt organization generally would constitute UBTI to such tax-exempt organization. In addition, even if such indebtedness were not used either by our company or by the Property Partnership to acquire property but were instead used to fund distributions to our unitholders, if a tax-exempt organization subject to taxation in the United States were to use such proceeds to make an investment outside our company, the IRS might assert that such investment constitutes debt-financed property to such unitholder with the consequences noted above. The BPY General Partner does not expect our company or the Property Partnership to directly incur debt to acquire property, and the BPY General Partner does not believe that our company or the Property Partnership will generate UBTI attributable to debt-financed property in the future. Moreover, the BPY General Partner intends to use commercially reasonable efforts to structure the activities of our company and the Property Partnership, respectively, to avoid generating UBTI. However, neither our company nor the Property Partnership is prohibited from incurring indebtedness, and no assurance can be provided that neither our company nor the Property Partnership will generate UBTI attributable to debt-financed property in the future.

Tax-exempt organizations will be subject to special rules applicable to an indirect investment by our company in a REIT. Based upon an IRS ruling, distributions paid by a REIT to our company and allocated to a tax-exempt organization generally should not give rise to UBTI, provided that (i) our interest in the REIT is not debt-financed, (ii) the tax-exempt organization’s interest in our company is not debt-financed and is not used in an unrelated trade or business, and (iii) the REIT does not hold an asset, such as an interest in a “taxable mortgage pool” or a residual interest in a “real estate mortgage investment conduit”, that gives rise to “excess inclusion income”. Special rules apply to social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17), and (c)(20) of the U.S. Internal Revenue Code.

Tax-exempt U.S. Holders should consult their own tax advisers regarding the tax consequences of an investment in our units.

Consequences to Non-U.S. Holders

Based on our organizational structure, as well as our company’s expected income and assets, the BPY General Partner currently believes that our company is unlikely to earn income treated as effectively connected with a U.S. trade or business, including effectively connected income attributable to the sale of a “United States real property interest”, as defined in the U.S. Internal Revenue Code. Specifically, our company intends not to make an investment, whether directly or through an entity which would be treated as a partnership for U.S. federal income tax purposes, if the BPY General Partner believes at the time of such investment that such investment would generate income treated as effectively connected with a U.S. trade or business. If, as anticipated, our company is not treated as engaged in a U.S. trade or business or as deriving income which is treated as effectively connected with a U.S. trade or business, and provided that a Non-U.S. Holder is not itself engaged in a U.S. trade or business, then such Non-U.S. Holder generally will not be subject to U.S. tax return filing requirements solely as a result of owning our units and generally will not be subject to U.S. federal income tax on its allocable share of our company’s interest and dividends from non-U.S.-sources or gain from the sale or other disposition of securities or real property located outside of the United States.

However, there can be no assurance that the law will not change or that the IRS will not deem our company to be engaged in a U.S. trade or business. If, contrary to the BPY General Partner’s expectations, our company is treated as engaged in a U.S. trade or business, then a Non-U.S. Holder generally would be required to file a U.S. federal income tax return, even if no effectively connected income were allocable to it. If our company were to have income treated as effectively connected with a U.S. trade or business, then a Non-U.S. Holder would be required to report that income and would be subject to U.S. federal income tax at the regular graduated rates. In addition, our company might be required to withhold U.S. federal income tax on such Non-U.S. Holder’s distributive share of such income. A corporate Non-U.S. Holder might also be subject to branch profits tax at a rate of 30%, or at a lower treaty rate, if applicable. ~~Under the Tax Cuts and Jobs Act, if,~~If, contrary to expectation, our company were engaged in a U.S. trade or business, then gain or loss from the sale of our units by a Non-U.S. Holder would be treated as effectively connected with such trade or business to the extent that such Non-U.S. Holder would have had effectively connected gain or loss had our company sold all of its assets at their fair market value as of the date of such sale. In such case, any such effectively connected gain generally would be taxable at the regular graduated U.S. federal income tax rates, and the amount realized from such sale generally would be subject to a 10% U.S.

federal withholding tax. The 10% U.S. federal withholding tax temporarily is suspended with respect to the disposition of an interest in a publicly traded partnership until ~~regulations~~proposed U.S. Treasury Regulations or other guidance has been ~~issued.~~made final.

In general, even if our company is not engaged in a U.S. trade or business, and assuming you are not otherwise engaged in a U.S. trade or business, you will nonetheless be subject to a withholding tax of 30% on the gross amount of certain U.S.-source income which is not effectively connected with a U.S. trade or business. Income subjected to such a flat tax rate is income of a fixed or determinable annual or periodic nature, including dividends and certain interest income. Such withholding tax may be reduced or eliminated with respect to certain types of income under an applicable income tax treaty between the United States and your country of residence or under the “portfolio interest” rules or other provisions of the U.S. Internal Revenue Code, provided that you provide proper certification as to your eligibility for such treatment. Notwithstanding the foregoing, and although each Non-U.S. Holder is required to provide us with an IRS Form W-8, we nevertheless may be unable to accurately or timely determine the tax status of our investors for purposes of establishing whether reduced rates of withholding apply to some or all of our investors. In such a case, your allocable share of distributions of U.S.-source dividends and interest income will be subject to U.S. withholding tax at a rate of 30%. Further, if you would not be subject to U.S. tax based on your tax status or otherwise were eligible for a reduced rate of U.S. withholding, you might need to take additional steps to receive a credit or refund of any excess withholding tax paid on your account, which could include the filing of a non-resident U.S. income tax return with the IRS. Among other limitations applicable to claiming treaty benefits, if you reside in a treaty jurisdiction which does not treat our company as a pass-through entity, you might not be eligible to receive a refund or credit of excess U.S. withholding taxes paid on your account. In the event you transfer or otherwise dispose of some or all of your units, special rules may apply for purposes of determining whether you or the transferee of such units are subject to U.S. withholding taxes in respect of income allocable to, or distributions made on account of, such units or entitled to refunds of any such taxes withheld. See “-Administrative Matters-Certain Effects of a Transfer of Units”. You should consult your own tax adviser regarding the treatment of U.S. withholding taxes.

Special rules may apply to any Non-U.S. Holder (i) that has an office or fixed place of business in the United States; (ii) that is present in the United States for 183 days or more in a taxable year; or (iii) that is (a) a former citizen or long-term resident of the United States, (b) a foreign insurance company that is treated as holding a partnership interest in our company in connection with its U.S. business, (c) a PFIC, (d) a CFC or ~~(d)~~(e) a corporation that accumulates earnings to avoid U.S. federal income tax. You should consult your own tax adviser regarding the application of these special rules.

Taxes in Other Jurisdictions

Based on our expected method of operation and the ownership of our operating entities indirectly through corporate Holding Entities, we do not expect any unitholder, solely as a result of owning our units, to be subject to any additional income taxes imposed on a net basis or additional tax return filing requirements in any jurisdiction in which we conduct activities or own property. However, our method of operation and current structure may change, and there can be no assurance that, solely as a result of owning our units, you will not be subject to certain taxes, including non-U.S., state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes imposed by the various jurisdictions in which we do business or own property now or in the future, even if you do not reside in any of these jurisdictions. Consequently, you may also be required to file non-U.S., state and local income tax returns in some or all of these jurisdictions. Further, you may be subject to penalties for failure to comply with these requirements. It is your responsibility to file all U.S. federal, state, local, and non-U.S. tax returns that may be required of you.

Income or gain from investments held by our company may be subject to withholding or other taxes in jurisdictions outside the United States, except to the extent an income tax treaty applies. If you wish to claim the benefit of an applicable income tax treaty, you might be required to submit information to one or more of our company, an intermediary, or a tax authority in such jurisdiction. You should consult your own tax adviser regarding the U.S. federal, state, local, and non-U.S. tax consequences of an investment in our company.

Administrative Matters

Information Returns and Audit Procedures

We have agreed to use commercially reasonable efforts to furnish to you, within 90 days after the close of each calendar year, U.S. tax information (including IRS Schedule K-1), which describes on a U.S. Dollar basis your share of our company’s income, gain, loss, and deduction for our preceding taxable year. However, providing this U.S. tax information to our unitholders will be subject to delay in the event of, among other reasons, the late receipt of any necessary tax information from lower-tier entities. It is therefore possible that, in any taxable year, you will need to apply for an extension of time to file your tax returns. In preparing this U.S. tax information, we will use various accounting and reporting conventions, some of which have been

mentioned in the previous discussion, to determine your share of income, gain, loss, and deduction. The IRS may successfully contend that certain of these reporting conventions are impermissible, which could result in an adjustment to your income or loss.

Our company may be audited by the IRS. Adjustments resulting from an IRS audit could require you to adjust a prior year’s tax liability and result in an audit of your own tax return. Any audit of your tax return could result in adjustments not related to our company’s tax returns, as well as those related to our company’s tax returns. ~~Under the Bipartisan Budget Act of 2015, for~~For taxable years beginning after December 31, 2017, if the IRS makes an audit adjustment to our income tax returns, it may assess and collect any taxes (including penalties and interest) resulting from such audit adjustment directly from our company instead of unitholders (as under prior law). We may be permitted to elect to have the BPY General Partner and our unitholders take such audit adjustment into account in accordance with their interests in us during the taxable year under audit. However, there can be no assurance that we will choose to make such election or that it will be available in all circumstances. If we do not make the election, and we pay taxes, penalties, or interest as a result of an audit adjustment, then cash available for distribution to our unitholders might be substantially reduced. As a result, our current unitholders might bear some or all of the cost of the tax liability resulting from such audit adjustment, even if our current unitholders did not own our units during the taxable year under audit. The foregoing considerations also apply with respect to our company’s interest in the Property Partnership.

For taxable years beginning on or before December 31, 2017, the BPY General Partner will act as our company’s “tax matters partner.” As the tax matters partner, the BPY General Partner will have the authority, subject to certain restrictions, to act on behalf of our company in connection with any administrative or judicial review of our company’s items of income, gain, loss, deduction, or credit. For taxable years beginning after December 31, 2017, a “partnership representative” designated by our company will have the sole authority to act on behalf of our company in connection with such administrative or judicial review. In particular, our partnership representative will have the sole authority to bind both our former and current unitholders and to make certain elections on behalf of our company pursuant to the ~~Bipartisan Budget Act of 2015.~~partnership audit rules.

The application of the ~~Bipartisan Budget Act of 2015~~partnership audit rules to our company and our unitholders is ~~uncertain and remains subject to U.S. Treasury Regulations and IRS guidance yet to be made final.~~uncertain. You should consult your own tax adviser regarding the implications of the ~~Bipartisan Budget Act of 2015~~partnership audit rules for an investment in our units.

Tax Shelter Regulations and Related Reporting Requirements

If we were to engage in a “reportable transaction”, we (and possibly our unitholders) would be required to make a detailed disclosure of the transaction to the IRS in accordance with regulations governing tax shelters and other potentially tax-motivated transactions. A transaction may be a reportable transaction based upon any of several factors, including the fact that it is a type of tax avoidance transaction publicly identified by the IRS as a “listed transaction” or “transaction of interest”, or that it produces certain kinds of losses exceeding certain thresholds. An investment in our company may be considered a “reportable transaction” if, for example, our company were to recognize certain significant losses in the future. In certain circumstances, a unitholder who disposes of an interest in a transaction resulting in the recognition by such holder of significant losses in excess of certain threshold amounts may be obligated to disclose its participation in such transaction. Certain of these rules are unclear, and the scope of reportable transactions can change retroactively. Therefore, it is possible that the rules may apply to transactions other than significant loss transactions.

Moreover, if we were to participate in a reportable transaction with a significant purpose to avoid or evade tax, or in any listed transaction, you might be subject to significant accuracy related penalties with a broad scope, for those persons otherwise entitled to deduct interest on federal tax deficiencies, non-deductibility of interest on any resulting tax liability, and in the case of a listed transaction, an extended statute of limitations. We do not intend to participate in any reportable transaction with a significant purpose to avoid or evade tax, nor do we intend to participate in any listed transactions. However, no assurance can be provided that the IRS will not assert that we have participated in such a transaction.

You should consult your own tax adviser concerning any possible disclosure obligation under the regulations governing tax shelters with respect to the disposition of our units.

Taxable Year

Our company uses the calendar year as its taxable year for U.S. federal income tax purposes. Under certain circumstances which we currently believe are unlikely to apply, a taxable year other than the calendar year may be required for such purposes.

Withholding and Backup Withholding

For each calendar year, we will report to you and to the IRS the amount of distributions that we pay, and the amount of tax (if any) that we withhold on these distributions. The proper application to our company of the rules for withholding under

Sections 1441 through 1446 of the U.S. Internal Revenue Code (applicable to certain dividends, interest, and amounts treated as effectively connected with a U.S. trade or business, among other items) is unclear. Because the documentation we receive may not properly reflect the identities of our unitholders at any particular time (in light of possible sales of our units), we may over-withhold or under-withhold with respect to a particular unitholder. For example, we may impose withholding, remit such amount to the IRS and thus reduce the amount of a distribution paid to a Non-U.S. Holder. It may be the case, however, that the corresponding amount of our income was not properly allocable to such holder, and the appropriate amount of withholding should have been less than the actual amount withheld. Such Non-U.S. Holder would be entitled to a credit against the holder’s U.S. federal income tax liability for all withholding, including any such excess withholding. However, if the withheld amount were to exceed the holder’s U.S. federal income tax liability, the holder would need to apply for a refund to obtain the benefit of such excess withholding. Similarly, we may fail to withhold on a distribution, and it may be the case that the corresponding income was properly allocable to a Non-U.S. Holder and that withholding should have been imposed. In such case, we intend to pay the under-withheld amount to the IRS, and we may treat such under-withholding as an expense that will be borne indirectly by all unitholders on a pro rata basis (since we may be unable to allocate any such excess withholding tax cost to the relevant Non-U.S. Holder).

Under the backup withholding rules, you may be subject to backup withholding tax with respect to distributions paid unless: (i) you are an exempt recipient and demonstrate this fact when required; or (ii) provide a taxpayer identification number, certify as to no loss of exemption from backup withholding tax, and otherwise comply with the applicable requirements of the backup withholding tax rules. A U.S. Holder that is exempt should certify such status on a properly completed IRS Form W-9. A Non-U.S. Holder may qualify as an exempt recipient by submitting a properly completed IRS Form W-8. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund from the IRS, provided you supply the required information to the IRS in a timely manner.

If you do not timely provide our company, or the applicable nominee, broker, clearing agent, or other intermediary, with IRS Form W-9 or IRS Form W-8, as applicable, or such form is not properly completed, then our company may become subject to U.S. backup withholding taxes in excess of what would have been imposed had our company or the applicable intermediary received properly completed forms from all of our unitholders. For administrative reasons, and in order to maintain the fungibility of

our units, such excess U.S. backup withholding taxes, and if necessary similar items, may be treated by our company as an expense that will be borne indirectly by all unitholders on a pro rata basis (e.g., since it may be impractical for us to allocate any such excess withholding tax cost to the unitholders that failed to timely provide the proper U.S. tax forms).

Foreign Account Tax Compliance

FATCA imposes a 30% withholding tax on “withholdable payments” made to a “foreign financial institution” or a “non-financial foreign entity”, unless such financial institution or entity satisfies certain information reporting or other requirements. Withholdable payments include certain U.S.-source income, such as interest, dividends, and other passive income. ~~Beginning January 1, 2019, withholdable payments also include~~Recently proposed U.S. Treasury Regulations eliminate the requirement to withhold tax under FATCA on gross proceeds from the sale or disposition of property that can produce U.S.-source interest or dividends. The IRS has announced that taxpayers are permitted to rely on the proposed regulations until final U.S. Treasury Regulations are issued.

We intend to comply with FATCA, so as to ensure that the 30% withholding tax does not apply to any withholdable payments received by our company, the Property Partnership, the Holding Entities, or the operating entities. Nonetheless, the 30% withholding tax may apply to your allocable share of distributions attributable to withholdable payments, unless you properly certify your FATCA status on IRS Form W-8 or IRS Form W-9 (or other applicable form) and satisfy any additional requirements under FATCA.

In compliance with FATCA, information regarding certain unitholders’ ownership of our units may be reported to the IRS or to a non-U.S. governmental authority. FATCA remains subject to modification by an applicable intergovernmental agreement between the United States and another country, such as the agreement in effect between the United States and Bermuda for cooperation to facilitate the implementation of FATCA, or by future U.S. Treasury Regulations or guidance. You should consult your own tax adviser regarding the consequences under FATCA of an investment in our units.

Information Reporting with Respect to Foreign Financial Assets

Under U.S. Treasury Regulations, certain U.S. persons that own “specified foreign financial assets” with an aggregate fair market value exceeding either $50,000 on the last day of the taxable year or $75,000 at any time during the taxable year generally are required to file an information report with respect to such assets with their tax returns. Significant penalties may apply to persons who fail to comply with these rules. Specified foreign financial assets include not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or

security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person, and any interest in a foreign entity. The failure to report information required under the current regulations could result in substantial penalties and in the extension of the statute of limitations with respect to federal income tax returns filed by you. You should consult your own tax adviser regarding the possible implications of these U.S. Treasury Regulations for an investment in our units.

Certain Effects of a Transfer of Units

Our company may allocate items of income, gain, loss, deduction, and credit using a monthly convention, whereby any such items recognized in a given month by our company are allocated to our unitholders as of a specified date of such month. Any U.S. withholding taxes applicable to dividends received by the Property Partnership (and, in turn, our company) generally will be withheld by our company only when such dividends are paid. Because our company generally intends to distribute amounts received in respect of dividends shortly after receipt of such amounts, it is generally expected that any U.S. withholding taxes withheld by our company on such amounts will correspond to our unitholders who were allocated income and who received the distributions in respect of such amounts. The Property Partnership may invest in debt obligations or other securities for which the accrual of interest or income thereon is not matched by a contemporaneous receipt of cash. Any such accrued interest or other income would be allocated pursuant to such monthly convention. Consequently, our unitholders may recognize income in excess of cash distributions received from our company, and any income so included by a unitholder would increase the basis such unitholder has in our units and would offset any gain (or increase the amount of loss) realized by such unitholder on a subsequent disposition of its units. In addition, U.S. withholding taxes generally would be withheld by our company only on the payment of cash in respect of such accrued interest or other income, and, therefore, it is possible that some unitholders would be allocated income which might be distributed to a subsequent unitholder, and such subsequent unitholder would be subject to withholding at the time of distribution. As a result, the subsequent unitholder, and not the unitholder who was allocated income, would be entitled to claim any available credit with respect to such withholding.

The Property Partnership has invested and will continue to invest in certain Holding Entities and operating entities organized in non-U.S. jurisdictions, and income and gain from such investments may be subject to withholding and other taxes in such jurisdictions. If any such non-U.S. taxes were imposed on income allocable to a U.S. Holder, and such holder were thereafter to dispose of its units prior to the date distributions were made in respect of such income, under applicable provisions of the U.S. Internal Revenue Code and U.S. Treasury Regulations, the unitholder to whom such income was allocated (and not the unitholder

to whom distributions were ultimately made) would, subject to other applicable limitations, be the party permitted to claim a credit for such non-U.S. taxes for U.S. federal income tax purposes. Thus a unitholder may be affected either favorably or adversely by the foregoing rules. Complex rules may, depending on a unitholder’s particular circumstances, limit the availability or use of foreign tax credits, and you are urged to consult your own tax adviser regarding all aspects of foreign tax credits.

Nominee Reporting

Persons who hold an interest in our company as a nominee for another person may be required to furnish to us:


a)	the name, address and taxpayer identification number of the beneficial owner and the nominee;


b)	whether the beneficial owner is (1) a person that is not a U.S. person, (2) a foreign government, an international organization, or any wholly owned agency or instrumentality of either of the foregoing, or (3) a tax-exempt entity;


c)	the amount and description of units held, acquired, or transferred for the beneficial owner; and


d)	specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales.

Brokers and financial institutions may be required to furnish additional information, including whether they are U.S. persons and specific information on units they acquire, hold, or transfer for their own account. A penalty of $250 per failure (as adjusted for inflation), up to a maximum of $3,000,000 per calendar year (as adjusted for inflation), generally is imposed by the U.S. Internal Revenue Code for the failure to report such information to us. The nominee is required to supply the beneficial owner of our units with the information furnished to us.

New Legislation or Administrative or Judicial Action

The U.S. federal income tax treatment of our unitholders depends, in some instances, on determinations of fact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. You should be aware that the U.S. federal income tax rules, particularly those applicable to partnerships, are constantly under review (including currently) by the Congressional tax-writing committees and other persons involved in the legislative process, the IRS, the U.S. Treasury Department and the courts, frequently resulting in revised interpretations of established concepts,

statutory changes, revisions to regulations and other modifications and interpretations, any of which could adversely affect the value of our units and be effective on a retroactive basis. For example, changes to the U.S. federal tax laws and interpretations thereof could make it more difficult or impossible for our company to be treated as a partnership that is not taxable as a corporation for U.S. federal income tax purposes, change the character or treatment of portions of our company’s income, ~~(including changes that recharacterize certain allocations as potentially non-deductible fees),~~ reduce the net amount of distributions available to our unitholders, or otherwise affect the tax considerations of owning our units. Such changes could also affect or cause our company to change the way it conducts its activities and adversely affect the value of our units.

Our company’s organizational documents and agreements permit the BPY General Partner to modify our limited partnership agreement from time to time, without the consent of our unitholders, to elect to treat our company as a corporation for U.S. federal tax purposes, or to address certain changes in U.S. federal income tax regulations, legislation or interpretation. In some circumstances, such revisions could have a material adverse impact on some or all of our unitholders.

THE FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING. THE TAX MATTERS RELATING TO OUR COMPANY AND UNITHOLDERS ARE COMPLEX AND ARE SUBJECT TO VARYING INTERPRETATIONS. MOREOVER, THE EFFECT OF EXISTING INCOME TAX LAWS, THE MEANING AND IMPACT OF WHICH IS UNCERTAIN, AND OF PROPOSED CHANGES IN INCOME TAX LAWS WILL VARY WITH THE PARTICULAR CIRCUMSTANCES OF EACH UNITHOLDER, AND IN REVIEWING THIS ANNUAL REPORT ON FORM 20-F THESE MATTERS SHOULD BE CONSIDERED. EACH UNITHOLDER SHOULD CONSULT ITS OWN TAX ADVISER WITH RESPECT TO THE U.S. FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES OF ANY INVESTMENT IN OUR UNITS.

Certain Material Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax consequences under the Tax Act of the holding and disposition of units of our company generally applicable to a unitholder, who for purposes of the Tax Act and at all relevant times, holds our units as capital property, deals at arm’s length with and is not affiliated with our company, the Property Partnership, the BPY General Partner and their respective affiliates ~~or a Holder.~~(a “Holder”). Generally, our units will be considered to be capital property to a Holder, provided that the Holder does not use or hold our units in the course of carrying on a business of trading or dealing in securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.

This summary is not applicable to a Holder: (i) that is a “financial institution” as defined in the Tax Act for purposes of the “mark-to-market” property rules, (ii) that is a “specified financial institution” as defined in the Tax Act, (iii) who makes or has made a functional currency reporting election pursuant to section 261 of the Tax Act, (iv) an interest in which would be a “tax shelter investment” as defined in the Tax Act or who acquires our units as a “tax shelter investment” (and this summary assumes that no such persons hold our units), (v) that has, directly or indirectly, a “significant interest” as defined in subsection 34.2(1) of the Tax Act in our company, (vi) if any affiliate of our company is, or becomes as part of a series of transactions that includes the acquisition of units of our company, a “foreign affiliate” for purposes of the Tax Act of such Holder or of any corporation that does not deal at arm’s length with such Holder for purposes of the Tax Act, or (vii) that has entered into or will enter into a “derivative forward agreement”, as defined in the Tax Act, in respect of our units. Any such Holders should consult their own tax advisors with respect to an investment in our units.

This summary is based on the current provisions of the Tax Act, all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof ~~or the Tax Proposals,~~(the “Tax Proposals”) and the current published administrative and assessing policies and practices of the CRA. This summary assumes that all Tax Proposals will be enacted in the form proposed but no assurance can be given that the Tax Proposals will be enacted in the form proposed or at all. This summary does not otherwise take into account or anticipate any changes in law, whether by judicial, administrative or legislative decision or action, or changes in the CRA’s administrative and assessing policies and practices, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ significantly from those described herein. This summary is not exhaustive of all possible Canadian federal income tax consequences that may affect our unitholders. Holders should consult their own tax advisors in respect of the provincial, territorial or foreign income tax consequences to them of holding and disposing of our units.

This summary assumes that neither our company nor the Property Partnership is a “tax shelter” as defined in the Tax Act or a “tax shelter investment”. However, no assurance can be given in this regard.

This summary also assumes that neither our company nor the Property Partnership will be a “SIFT partnership” at any relevant time for purposes of the SIFT Rules on the basis that neither our company nor the Property Partnership will be a “Canadian resident partnership” at any relevant time. However, there can be no assurance that the SIFT Rules will not be revised or amended such that the SIFT Rules will apply.

This summary does not address the deductibility of interest on money borrowed to acquire our units nor whether any amounts in respect of our units could be “split income” for the purposes of the Tax ~~Act or the Tax Proposals.~~Act.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder, and no representation with respect to the Canadian federal income tax consequences to any particular Holder is made. Consequently, Holders are advised to consult their own tax advisors with respect to their particular circumstances. See also Item 3.D. “Risk Factors - Risks Relating to Taxation - Canada”.

For purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our units must be expressed in Canadian dollars including any distributions, adjusted cost base and proceeds of disposition. For purposes of the Tax Act, amounts denominated in a currency other than the Canadian dollar generally must be converted into Canadian dollars using the appropriate exchange rate determined in accordance with the detailed rules in the Tax Act in that regard.

Taxation of Canadian Resident Limited Partners

The following portion of the summary is generally applicable to a Holder who, for purposes of the Tax Act and at all relevant times, is resident or deemed to be resident in Canada ~~or a Canadian~~(a “Canadian Limited ~~Partner.~~Partner”).

Computation of Income or Loss

Each Canadian Limited Partner is required to include (or, subject to the “at-risk rules” discussed below, entitled to deduct) in computing his or her income for a particular taxation year the Canadian Limited Partner’s share of the income (or loss) of our company for its fiscal year ending in, or coincidentally with, the Canadian Limited Partner’s taxation year end, whether or not any of that income is distributed to the Canadian Limited Partner in the taxation year and regardless of whether or not our units were held throughout such year.

Our company will not itself be a taxable entity and is not expected to be required to file an income tax return in Canada for any taxation year. However, the income (or loss) of our company for a fiscal period for purposes of the Tax Act will be computed

as if it were a separate person resident in Canada and the partners will be allocated a share of that income (or loss) in accordance with our limited partnership agreement. The income (or loss) of our company will include our company’s share of the income (or loss) of the Property Partnership for a fiscal year determined in accordance with the Property Partnership’s limited partnership agreement. For this purpose, our company’s fiscal year end and that of the Property Partnership will be December 31.

The income for tax purposes of our company for a given fiscal year will be allocated to each Canadian Limited Partner in an amount calculated by multiplying such income by a fraction, the numerator of which is the sum of the distributions received by such Canadian Limited Partner with respect to such fiscal year and the denominator of which is the aggregate amount of the distributions made by our company to all partners with respect to such fiscal ~~year.~~year, provided that the numerator and denominator will not include any distributions on the preferred units that are in satisfaction of accrued distributions on the preferred units that were not paid in a previous fiscal year of our company where the BPY General Partner determines that the inclusion of such distributions would result in a holder of the preferred units being allocated more income than it would have been if the distributions were paid in the fiscal year of our company in which they were accrued.

If, with respect to a given fiscal year, no distribution is made by our company to our unitholders or our company has a loss for tax purposes, one quarter of the income, or loss, as the case may be, for tax purposes for such fiscal year that is allocable to our unitholders, will be allocated to ~~the~~our unitholders of record at the end of each calendar quarter ending in such fiscal year as follows: (i) to the holders of the preferred units in respect of the preferred units held by them on each such date, such amount of our company’s income or loss for tax purposes, as the case may be, as the BPY General Partner determines is reasonable in the circumstances having regard to such factors as the BPY General Partner considers to be relevant, including, without limitation, the relative amount of capital contributed to our company on the issuance of the preferred units as compared to all other units and the relative fair market value of the preferred units as compared to all other units, and (ii) to the partners, other than in respect of the preferred units, the remaining amount of our company’s income or loss for tax purposes, as the case may be, pro rata in the proportion that the number of units of our company held at each such date by a unitholder is of the total number of units of our company (other than the preferred units) that are issued and outstanding at each such date.

The income of our company as determined for purposes of the Tax Act may differ from its income as determined for accounting purposes and may not be matched by cash distributions. In addition, for purposes of the Tax Act, all income (or losses) of our company and the Property Partnership must be calculated in Canadian currency. Where our company (or the Property

Partnership) holds investments denominated in U.S. dollars or other foreign currencies, gains and losses may be realized by our company (or the Property Partnership) as a consequence of fluctuations in the relative values of the Canadian and foreign currencies.

In computing the income (or loss) of our company, deductions may be claimed in respect of reasonable administrative costs, interest and other expenses incurred by our company for the purpose of earning income, subject to the relevant provisions of the Tax Act. Our company may also deduct from its income for the year a portion of the reasonable expenses, if any, incurred by our company to issue our units. The portion of such issue expenses deductible by our company in a taxation year is 20% of such issue expenses, pro-rated where our company’s taxation year is less than 365 days.

In general, a Canadian Limited Partner’s share of any income (or loss) of our company from a particular source will be treated as if it were income (or loss) of the Canadian Limited Partner from that source, and any provisions of the Tax Act applicable to that type of income (or loss) will apply to the Canadian Limited Partner. Our company will invest in ~~limited~~general partnership units of the Property Partnership. In computing our company’s income (or loss) under the Tax Act, the Property Partnership will itself be deemed to be a separate person resident in Canada which computes its income (or loss) and allocates to its partners their respective share of such income (or loss). Accordingly, the source and character of amounts included in (or deducted from) the income of Canadian Limited Partners on account of income (or loss) earned by the Property Partnership generally will be determined by reference to the source and character of such amounts when earned by the Property Partnership.

A Canadian Limited Partner’s share of taxable dividends received or considered to be received by our company in a fiscal year from a corporation resident in Canada will be treated as a dividend received by the Canadian Limited Partner and will be subject to the normal rules in the Tax Act applicable to such dividends, including the enhanced gross-up and dividend tax credit for “eligible dividends” as defined in the Tax Act when the dividend received by the Property Partnership is designated as an “eligible dividend”.

Foreign taxes paid by our company or the Property Partnership and taxes withheld at source on amounts paid or credited to our company or the Property Partnership (other than for the account of a particular partner) will be allocated pursuant to the governing partnership agreement. Each Canadian Limited Partner’s share of the “business-income tax” and “non-business-income tax” paid to the government of a foreign country for a year will be creditable against its Canadian federal income tax liability to the extent permitted by the detailed foreign tax credit rules contained in the Tax Act. Although the foreign tax credit rules are designed to avoid double taxation, the maximum credit is limited. Because of this, and because of timing differences in recognition of expenses and income and other factors, the foreign tax credit rules may not provide a full foreign tax credit for the “business-income tax” and “non-business-income tax” paid by our company or the Property Partnership to the government of a foreign country. The Tax Act contains anti-avoidance rules to address certain foreign tax credit generator transactions. Under the Foreign Tax Credit Generator Rules, the foreign “business-income tax” or “non-business-income tax” allocated to a Canadian Limited Partner for the purpose of determining such Canadian Limited Partner’s foreign tax credit for any taxation year may be limited in certain circumstances, including where a Canadian Limited Partner’s share the income of our ~~company’s income~~company or the Property Partnership under the income tax laws of any country (other than Canada) under whose laws the income of our company or the Property Partnership is subject to income taxation ~~or the Relevant~~(the “Relevant Foreign Tax ~~Law,~~Law”) is less than the Canadian Limited Partner’s share of such income for purposes of the Tax Act. For this purpose, a Canadian Limited Partner is not considered to have a lesser direct or indirect share of the income of our company or the Property Partnership under the Relevant Foreign Tax Law than for the purposes of the Tax Act solely because,

among other reasons, of a difference between the Relevant Foreign Tax Law and the Tax Act in the manner of computing the income of our company or the Property Partnership or in the manner of allocating the income of our company or the Property Partnership because of the admission or withdrawal of a partner. No assurance can be given that the Foreign Tax Credit Generator Rules will not apply to any Canadian Limited Partner. If the Foreign Tax Credit Generator Rules apply, the allocation to a Canadian Limited Partner of foreign “business-income tax” or “non-business-income tax” paid by our company or the Property Partnership, and therefore such Canadian Limited Partner’s foreign tax credits, will be limited.

tax that non-resident partners may be entitled to under an applicable income tax treaty or convention in order to determine the appropriate amount of Canadian federal withholding tax to withhold from dividends or interest paid to the Property Partnership. However, there can be no assurance that the CRA will apply its administrative practice in this context. Under the Treaty, a Canadian resident payer is required in certain circumstances to look-through fiscally transparent partnerships, such as our company and the Property Partnership, to the residency and Treaty entitlements of their partners and to take into account the reduced rates of Canadian federal withholding tax that such partners may be entitled to under the Treaty.

If our company incurs losses for tax purposes, each Canadian Limited Partner will be entitled to deduct in the computation of income for tax purposes the Canadian Limited Partner’s share of any net losses for tax purposes of our company for its fiscal year to the extent that the Canadian Limited Partner’s investment is “at-risk” within the meaning of the Tax Act. The Tax Act contains “at-risk rules” which may, in certain circumstances, restrict the deduction of a limited partner’s share of any losses of a limited partnership. The BPY General Partner does not anticipate that our company or the Property Partnership will incur losses but no assurance can be given in this regard. Accordingly, Canadian Limited Partners should consult their own tax advisors for specific advice with respect to the potential application of the “at-risk rules”.

Section 94.1 of the Tax Act contains rules relating to interests held by a taxpayer in Non-Resident Entities that could, in certain circumstances, cause income to be imputed to Canadian Limited Partners, either directly or by way of allocation of such income imputed to our company or the Property Partnership. These rules would apply if it is reasonable to conclude, having regard to all the circumstances, that one of the main reasons for the Canadian Limited Partner, our company or the Property Partnership acquiring, holding or having an investment in a ~~non-resident entity~~Non-Resident Entity is to derive a benefit from “portfolio investments” in certain assets from which the Non-Resident Entity may reasonably be considered to derive its value in such a manner that taxes under the Tax Act on income, profits and gains from such assets for any year are significantly less than they would have been if such income, profits and gains had been earned directly. In determining whether this is the case, section 94.1 of the Tax Act provides that consideration must be given to, among other factors, the extent to which the income, profits and gains for any fiscal period are distributed in that or the immediately following fiscal period. No assurance can be given that section 94.1 of the Tax Act will not apply to a Canadian Limited Partner, our company or the Property Partnership. If these rules apply to a Canadian Limited Partner, our company or the Property Partnership, income, determined by reference to a prescribed rate of interest plus two percent applied to the “designated cost”, as defined in section 94.1 of the Tax Act, of the interest in the Non-Resident Entity, will be imputed directly to the Canadian Limited Partners or to our company or the Property Partnership and allocated to the Canadian Limited Partners in accordance with the rules in section 94.1 of the Tax Act. The rules in section 94.1 of the Tax Act are complex and Canadian Limited Partners should consult their own tax advisors regarding the application of these rules to them in their particular circumstances.

Dividends paid to the Property Partnership by a CFA of the Property Partnership will be included in computing the income of the Property Partnership. To the extent that any CFA or Indirect CFA of the Property Partnership earns income that is characterized as FAPI in a particular taxation year of the CFA or Indirect CFA, the FAPI allocable to the Property Partnership under the rules in the Tax Act must be included in computing the income of the Property Partnership for Canadian federal income tax purposes for the fiscal period of the Property Partnership in which the taxation year of that CFA or Indirect CFA ends, whether or not the Property Partnership actually receives a distribution of that FAPI. Our company will include its share of such FAPI of the Property Partnership in computing its income for Canadian federal income tax purposes and Canadian Limited Partners will be required to

include their proportionate share of such FAPI allocated from our company in computing their income for Canadian federal income tax purposes. As a result, Canadian Limited Partners may be required to include amounts in their income even though they have not and may not receive an actual cash distribution of such amounts. If an amount of FAPI is included in computing the income of the Property Partnership for Canadian federal income tax purposes, an amount may be deductible in respect of the “foreign accrual tax” applicable to the FAPI. Any amount of FAPI included in income net of the amount of any deduction in respect of “foreign accrual tax” will increase the adjusted cost base to the Property Partnership of its shares of the particular CFA in respect of which the FAPI was included. At such time as the Property Partnership receives a dividend of this type of income that was previously included in the Property Partnership’s income as FAPI, such dividend will effectively not be included in computing the income of the Property Partnership and there will be a corresponding reduction in the adjusted cost base to the Property Partnership of the particular CFA shares. Under the Foreign Tax Credit Generator Rules, the “foreign accrual tax” applicable to a particular amount of FAPI included in the Property Partnership’s income in respect of a particular “foreign affiliate” of the Property Partnership may be limited in certain specified circumstances, including where the direct or indirect share of the income allocated to any member of the Property Partnership (which is deemed for this purpose to include a Canadian Limited Partner) that is a person resident in Canada or a “foreign affiliate” of such a person is, under a Relevant Foreign Tax Law, less than such member’s share of such income for purposes of the Tax Act. No assurance can be given that the Foreign Tax Credit Generator Rules will not apply to the Property Partnership. For this purpose, a Canadian Limited Partner is not considered to have a lesser direct or indirect share of the income of the Property Partnership under the Relevant Foreign Tax Law than for the purposes of the Tax Act solely because, among other reasons, of a difference between the Relevant Foreign Tax Law and the Tax Act in the manner of computing the income of the Property Partnership or in the manner of allocating the income of the Property Partnership because of the

admission or withdrawal of a partner. If the Foreign Tax Credit Generator Rules apply, the “foreign accrual tax” applicable to a particular amount of FAPI included in the Property Partnership’s income in respect of a particular “foreign affiliate” of the Property Partnership will be limited.

Disposition of Our Units

The disposition (or deemed disposition) by a Canadian Limited Partner of our units will result in the realization of a capital gain (or capital loss) by such Canadian Limited Partner in the amount, if any, by which the proceeds of disposition of our units, less any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of such units. Subject to the general rules on averaging of cost base, the adjusted cost base of a Canadian Limited Partner’s units of our company would generally be equal to: (i) the actual cost of our units (excluding any portion thereof financed with limited recourse indebtedness); plus (ii) the share of the income of our company allocated to the Canadian Limited Partner for fiscal years of our company ending before the relevant time in respect of our units; less (iii) the aggregate of the ~~pro rata~~pro-rata share of losses of our company allocated to the Canadian Limited Partner (other than losses which cannot be deducted because they exceed the Canadian Limited Partner’s “at-risk” amount) for the fiscal years of our company ending before the relevant time in respect of our units; and less (iv) the Canadian Limited Partner’s distributions received from our company made before the relevant time in respect of our units.

The foregoing discussion of the calculation of the adjusted cost base assumes that each class or series of partnership interests in our company are treated as separate property for purposes of the Tax Act. However, the CRA’s position is to treat all the different types of interests in a partnership that a partner may hold as one capital property, including for purposes of determining the adjusted cost base of all such partnership interests. As a result, on a disposition of a particular type of unit, a partner’s total adjusted cost base is required to be allocated in a reasonable manner to the particular type of unit being disposed of. As acknowledged by the CRA, there is no particular method for determining a reasonable allocation of the adjusted cost base of a partnership interest to the part of the partnership interest that is disposed of. Furthermore, more than one method may be reasonable. If the CRA’s position applies, on a disposition by a Canadian Limited Partner of a particular type of unit of our company, the Canadian Limited Partner should generally be able to allocate his or her adjusted cost base in a manner that treats the different classes or series of units of our company as separate property. Accordingly, the BPY General Partner intends to provide partners with partnership information returns using such allocation.

Where a Canadian Limited Partner disposes of all of its units of our company, it will no longer be a partner of our company. If, however, a Canadian Limited Partner is entitled to receive a distribution from our company after the disposition of all such units, then the Canadian Limited Partner will be deemed to dispose of such units at the later of: (i) the end of the fiscal year of our company during which the disposition occurred; and (ii) the date of the last distribution made by our company to which the Canadian Limited Partner was entitled. The share of the income (or loss) of our company for tax purposes for a particular fiscal year which is allocated to a Canadian Limited Partner who has ceased to be a partner will generally be added (or deducted) in the computation of the adjusted cost base of the Canadian Limited Partner’s units of our company immediately prior to the time of the disposition.

A Canadian Limited Partner will generally realize a deemed capital gain if, and to the extent that, the adjusted cost base of the Canadian Limited Partner’s units of our company is negative at the end of any fiscal year of our company. In such a case, the adjusted cost base of the Canadian Limited Partner’s units of our company will be nil at the beginning of the next fiscal year of our company.

Canadian Limited Partners should consult their own tax advisors for advice with respect to the specific tax consequences to them of disposing of units of our company.

Taxation of Capital Gains and Capital Losses

In general, one-half of a capital gain realized by a Canadian Limited Partner must be included in computing such Canadian Limited Partner’s income as a taxable capital gain. One-half of a capital loss is deducted as an allowable capital loss against taxable capital gains realized in the year and any remainder may be deducted against net taxable capital gains in any of the three years preceding the year or any year following the year to the extent and under the circumstances described in the Tax Act.

Special rules in the Tax Act may apply to disallow the one-half treatment on all or a portion of a capital gain realized on a disposition of our units if a partnership interest is acquired by a tax-exempt person or a non-resident person (or by a partnership or trust (other than certain trusts) of which a tax-exempt person or a non-resident person is a member or beneficiary, directly or indirectly through one or more partnerships or trusts (other than certain trusts)). Canadian Limited Partners contemplating such a disposition should consult their own tax advisors in this regard.

A Canadian Limited Partner that is throughout the relevant taxation year a “Canadian-controlled private corporation” as defined in the Tax Act may be liable to pay an additional refundable tax on its “aggregate investment income”, as defined in the Tax Act, for the year, which is defined to include taxable capital gains.

Alternative Minimum Tax

Canadian Limited Partners that are individuals or trusts may be subject to the alternative minimum tax rules. Such Canadian Limited Partners should consult their own tax advisors.

Eligibility for Investment

Provided that our units are listed on a “designated stock exchange” (which currently includes the Nasdaq and the TSX), our units will be “qualified investments” under the Tax Act for ~~a trust~~trusts governed by ~~an RRSP,~~RRSPs, deferred profit sharing ~~plan, RRIF, RESP, RDSP~~plans, RESPs, RDSPs and ~~a TFSA.~~TFSAs, all as defined in the Tax Act.

Notwithstanding the foregoing, an annuitant under an RRSP or RRIF, a holder of a TFSA or an RDSP or a subscriber of an RESP, as the case may be, ~~may~~will be subject to a penalty tax if our units held in the RRSP, RRIF, TFSA, RDSP or RESP are a “prohibited investments”, as defined in the Tax Act, for the RRSP, RRIF, TFSA, RDSP or RESP, as the case may be. Our units will generally not be a “prohibited investment” ~~for a trust governed by an RRSP, RRIF, TFSA, RDSP or RESP, provided that~~if the annuitant under anthe RRSP or RRIF, the holder of athe TFSA or RDSP or athe subscriber of an RESP, as ~~the case may be,~~applicable, deals at arm’s length with our company for purposes of the Tax Act and does not have a “significant interest”, as defined in the Tax Act for purposes of the ~~prohibited investment~~“prohibited investment” rules, in our company. Canadian Limited Partners who will hold our units in an RRSP, RRIF, TFSA, RDSP or RESP should consult with their own tax advisors regarding the application of the foregoing ~~prohibited investment~~“prohibited investment” rules having regard to their particular circumstances.

Taxation of Non-Canadian Limited Partners

The following portion of the summary is generally applicable to a Holder who, for purposes of the Tax Act and at all relevant times, is not, and is not deemed to be, resident in Canada and who does not use or hold and is not deemed to use or hold our units in connection with a business carried on in Canada ~~or a Non-Canadian~~(a “Non-Canadian Limited ~~Partner.~~Partner”).

The following portion of the summary assumes that (i) our units are not and will not at any relevant time constitute “taxable Canadian property” of any Non-Canadian Limited Partner, and (ii) our company and the Property Partnership will not dispose of property that is “taxable Canadian property”. “Taxable Canadian property” includes, but is not limited to, property that is used or held in a business carried on in Canada and shares of corporations that are not listed on a “designated stock exchange” if more than 50% of the fair market value of the shares is derived from certain Canadian properties in the 60-month period immediately preceding the particular time. In general, our units will not constitute “taxable Canadian property” of any Non-Canadian Limited Partner at the time of disposition or deemed disposition, unless (a) at any time in the 60-month period immediately preceding the disposition or deemed disposition, more than 50% of the fair market value of our units was derived, directly or indirectly (excluding through a corporation, partnership or trust, the shares or interests in which were not themselves “taxable Canadian property”), from one or any combination of: (i) real or immovable property situated in Canada; (ii) “Canadian resource properties”; (iii) “timber resource properties”; and (iv) options in respect of, or interests in, or for civil law rights in, such property, whether or not such property exists, or (b) our units are otherwise deemed to be “taxable Canadian property”. Since our company’s assets will consist principally of units of the Property Partnership, our units would generally be “taxable Canadian property” at a particular time if the units of the Property Partnership held by our company derived, directly or indirectly (excluding through a corporation, partnership or trust, the shares or interests in which were not themselves “taxable Canadian property”), more than 50% of their fair market value from properties described in (i) to (iv) above, at any time in the 60-month period preceding the

particular time. The BPY General Partner does not expect our units to be “taxable Canadian property” at any relevant time and does not expect our company or the Property Partnership to dispose of “taxable Canadian property”. However, no assurance can be given in this regard.

The following portion of the summary also assumes that neither our company nor the Property Partnership will be considered to carry on business in Canada. The BPY General Partner intends to organize and conduct the affairs of each of these entities, to the extent possible, so that neither of these entities should be considered to carry on business in Canada for purposes of the Tax Act. However, no assurance can be given in this regard. If either of these entities carry on business in Canada, the tax implications to our company or the ~~Holding LP~~Property Partnership and to Non-Canadian Limited Partners may be materially and adversely different than as set out herein.

Special rules, which are not discussed in this summary, may apply to a Non-Canadian Limited Partner that is an insurer carrying on business in Canada and elsewhere.

Taxation of Income or Loss

A Non-Canadian Limited Partner will not be subject to Canadian federal income tax under Part I of the Tax Act on its share of income from a business carried on by our company (or the Property Partnership) outside Canada or the non-business-income earned by our company (or the Property Partnership) from sources in Canada. However, a Non-Canadian Limited Partner may be subject to Canadian federal withholding tax under Part XIII of the Tax Act, as described below.

Our company and the Property Partnership will each be deemed to be a non-resident person in respect of certain amounts paid or credited or deemed to be paid or credited to them by a person resident or deemed to be resident in Canada, including dividends or interest. Dividends or interest (other than interest not subject to Canadian federal withholding tax) paid or deemed to be paid by a person resident or deemed to be resident in Canada to the Property Partnership will be subject to withholding tax under Part XIII of the Tax Act at the rate of 25%. However, the CRA’s administrative practice in similar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to be computed by looking through the partnership and taking into account the residency of the partners (including partners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that any non-resident partners may be entitled to under an applicable income tax treaty or convention, provided that the residency status and entitlement to the treaty benefits can be established. In determining the rate of Canadian federal withholding tax applicable to amounts paid by the Holding Entities to the Property Partnership, the BPY General Partner expects the Holding Entities to look-through the Property Partnership and our company to the residency of the partners of our company (including partners who are resident in Canada) and to take into account any reduced rates of Canadian federal withholding tax that Non-Canadian Limited Partners may be entitled to under an applicable income tax treaty or convention in order to determine the appropriate amount of Canadian federal withholding tax to withhold from dividends or interest paid to the Property Partnership. However, there can be no assurance that the CRA will apply its administrative practice in this context. Under the Treaty, a Canadian resident payer is required in certain circumstances to look-through fiscally transparent partnerships, such as our company and the Property Partnership, to the residency and Treaty entitlements of their partners and take into account the reduced rates of Canadian federal withholding tax that such partners may be entitled to under the Treaty.

10.F. DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G. STATEMENT BY EXPERTS

Not applicable.

10.H DOCUMENTS ON DISPLAY

Our company is subject to the information filing requirements of the Exchange Act, and accordingly is required to file periodic reports and other information with the SEC. As a foreign private issuer under the SEC’s regulations, we file annual reports on Form 20-F and furnish other reports on Form 6-K. The information disclosed in our reports may be less extensive than that required to be disclosed in annual and quarterly reports on Forms 10-K and 10-Q required to be filed with the SEC by U.S. issuers. Moreover, as a foreign private issuer, we are not subject to the proxy requirements under Section 14 of the Exchange Act, and the BPY General Partner’s directors and our ~~principal~~major unitholders are not subject to the insider short swing profit reporting and recovery rules under Section 16 of the Exchange Act. ~~Our~~The SEC ~~filings are available at the SEC’s~~maintains an Internet website at www.sec.gov~~. You may also read~~that contains reports, proxy and ~~copy any document we~~information statements and other information regarding issuers that file electronically with the ~~SEC at the public reference facilities maintained by the SEC at SEC Headquarters,~~

~~Public Reference Section, 100 F Street, N.E., Washington D.C. 20549.~~SEC. You may obtain our SEC filings on the SEC website or on our website bpy.brookfield.com. The information on ~~the operation~~our website is not part of ~~the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330.~~this annual report.

In addition, our company is required by Canadian securities laws to file documents electronically with Canadian securities regulatory authorities and these filings are available on our SEDAR profile at www.sedar.com. Written requests for such documents should be directed to our Corporate Secretary at 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda.

10.I. SUBSIDIARY INFORMATION

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the information contained in this Form 20-F under Item 5.A. “Operating and Financial Review and Prospects - Operating Results - Risks and Uncertainties - Derivative Financial Instruments”.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, ~~2017,~~2019, an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) was carried out under the supervision and with the participation of persons performing the functions of principal executive and principal financial officers for us and our Service Providers. Based upon that evaluation, the persons performing the functions of principal executive and principal financial officers for us have concluded that, as of December 31, ~~2017,~~2019, our disclosure controls and procedures were effective: (i) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (ii) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the persons performing the functions of principal executive and principal financial officers for us, to allow timely decisions regarding required disclosure.

It should be noted that while our management, including persons performing the functions of principal executive and principal financial officers for us, believe our disclosure controls and procedures provide a reasonable level of assurance that such controls and procedures are effective, they do not expect that our disclosure controls and procedures or internal controls will prevent all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including persons performing the functions of principal executive and principal financial officers for us, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, ~~2017,~~2019, based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based

on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, ~~2017.~~

Our management excluded from its assessment the internal control over financial reporting at Manufactured Housing for which control was acquired on March 9, 2017, Toronto Hotel for which control was acquired on October 17, 2017, Houston Center for which control was acquired on December 1, 2017, Mumbai Office Portfolio for which control was acquired on December 7, 2017 and Towers @ 2^nd for which control was acquired on December 8, 2017, and whose financial statements constitute 5% and 4% of total and net assets, respectively, 4% of total revenue and 3% of net income as of and for the year ended December 31, 2017.2019.

Internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Report of Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, ~~2017~~2019 has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who have also audited the financial statements of our company, as stated in their reports which are included herein.

Changes in Internal Control

There was no change in our internal control over financial reporting during the year ended December 31, ~~2017,~~2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTS

The BPY General Partner’s board of directors has determined that Stephen DeNardo possesses specific accounting and financial management expertise and that he is an audit committee financial expert as defined by the SEC and is independent within the meaning of the rules of the Nasdaq. The BPY General Partner’s board of directors has also determined that other members of the Audit Committee have sufficient experience and ability in finance and compliance matters to enable them to adequately discharge their responsibilities.

ITEM 16B. CODE OF ETHICS

On April 4, 2013, the BPY General Partner adopted a Code of Conduct and Ethics ~~or the Code,~~(the “Code”) that applies to the members of the board of directors of the BPY General Partner, our company and any officers or employees of the BPY General Partner. The Code is reviewed and updated annually. We have posted a copy of the Code on our website at bpy.brookfield.com.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The BPY General Partner has retained Deloitte LLP to act as our company’s independent registered public accounting firm.

The table below summarizes the fees for professional services rendered by Deloitte LLP for the audit of our annual financial statements for the periods ended December 31, ~~2017~~2019 and ~~2016.~~2018.


	December 31, 2017				December 31, 2016				December 31, 2019				December 31, 2018
(US$ Thousands)	Total		%		Total		%		Total		%		Total		%
Audit fees⁽¹⁾	$	7,029	32	%	$	5,850	28	%	$	10,384	36	%	$	10,769	37	%
Audit-related fees⁽²⁾	14,210		65	%	13,934		66	%	17,580		62	%	18,000		62	%
Tax fees⁽³⁾	740		3	%	1,305		6	%	33		—	%	441		1	%
Other⁽⁴⁾	51		—	%	6		—	%	540		2	%	37		—	%
Total	$	22,030	100	%	$	21,095	100	%	$	28,537	100	%	$	29,247	100	%


⁽¹⁾	Audit fees include fees for the audit of our annual consolidated financial statements, internal control over financing reporting and interim reviews of the consolidated financial statements included in our quarterly interim reports. This category also includes fees for comfort letters, consents and review of certain documents filed with securities regulatory authorities.


⁽²⁾	Audit-related fees include fees for the audit or review of financial statements for certain of our subsidiaries, including audits of individual properties to comply with lender, joint venture partner or tenant requirements.


⁽³⁾	Tax fees are principally for assistance in tax return preparation and tax advisory services.


⁽⁴⁾	All other fees include fees for certain permissible consulting and advisory services, including assistance with corporate and social responsibility reporting.

The audit committee of the BPY General Partner pre-approves all audit and non-audit services provided to our partnership by Deloitte LLP.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Under our normal course issuer bid, our company may, during the twelve-month period commencing August ~~18, 2017~~20, 2019 and ending August ~~17, 2018,~~19, 2020, purchase on the TSX, the Nasdaq and any alternative Canadian trading system, up to ~~20,468,827~~35,252,769 of our ~~units,~~LP Units, representing approximately 10% of our issued and outstanding ~~units.~~LP Units. During the year ended December 31, ~~2017,~~2019, we purchased ~~5,913,672~~8,270,704 of our ~~units~~LP Units at an average price of ~~$22.95~~$19.11 per ~~unit.~~unit under our normal course issuer bid.

Under our substantial issuer bid, our company purchased by way of a “modified Dutch auction” 13,981,214 of our LP Units.

As of Dec. 31, 2017
Month (a) Total number of units purchased
(b) Average price paid per unit
(c) Total number of units purchased as part of publicly announced plans or programs
(d) Maximum number of units that may yet be purchased under the plans or programs
Jan. 2017 355,206
$ 21.72
355,206
10,672,861
Feb. 2017 4,061,944
$ 23.00
4,061,944
6,610,917
Apr. 2017 1,200
$ 22.00
1,200
6,609,717
May 2017 453,106
$ 22.00
453,106
6,156,611
Jun. 2017 39,316
$ 22.51
39,316
6,117,295
Aug. 2017 1,002,900
$ 23.64
1,002,900
5,114,395
Total 5,913,672
5,913,672



As of Dec. 31, 2019
Month	(a) Total number of units purchased	(b) Average price paid per unit		(c) Total number of units purchased as part of publicly announced plans or programs	(d) Maximum number of units that may yet be purchased under the plans or programs
Mar. 2019⁽¹⁾	13,981,214	$	21.00	13,981,214	—
Apr. 2019⁽²⁾	597,826	20.90		597,826	3,520,907
May 2019⁽²⁾	1,349,695	19.32		1,349,695	2,171,212
Jun. 2019⁽²⁾	733,093	18.53		733,093	1,438,119
Jul. 2019⁽²⁾	396,712	18.90		396,712	1,041,407
Aug. 2019⁽²⁾	702,820	18.83		702,820	34,952,769
Sep. 2019⁽²⁾	750,000	19.61		750,000	34,202,769
Oct. 2019⁽²⁾	1,041,067	19.14		1,041,067	33,161,702
Nov.2019⁽²⁾	1,049,491	18.96		1,049,491	32,112,211
Dec. 2019⁽²⁾	1,650,000	18.57		1,650,000	30,462,211
Total	22,251,918			22,251,918


⁽¹⁾	Our company purchased 13,981,214 of our LP Units at a price of $21.00 under the substantial issuer bid, which was announced on February 11, 2019. The offer to purchase our LP Units under the substantial issuer bid expired at 5:00 p.m. on March 25, 2019.


⁽²⁾	Under our normal course issuer bid, our company may, during the twelve-month period commencing August 20, 2019 and ending August 19, 2020, purchase on the TSX, the Nasdaq and any alternative Canadian trading system, approximately 10% of our issued and outstanding LP Units.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

Subject to certain exceptions, Nasdaq permits foreign private issuers to follow home country practice in lieu of Nasdaq’s

corporate governance requirements. Our corporate practices are not materially different from those required of domestic limited

partnerships under the Nasdaq listing ~~standards.~~standards, except that we follow Bermuda law in respect of approval of equity compensation

plans and material amendments thereto, which only requires approval by the board of directors of the BPY General Partner, whereas

Nasdaq rules generally require unitholder approval of such plans and amendments.

ITEM 16H. MINING SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration ~~or the MSHA,~~(the “MSHA”) under the Federal Mine Safety and Health Act of 1977, as amended, ~~or the Mine Act.~~(the “Mine Act”). During the fiscal year ended December 31, ~~2017,~~2019, our company did not have any mines in the United States subject to regulation by MSHA under the Mine Act.

~~PART III~~

~~ITEM 17. FINANCIAL STATEMENTS~~

~~Not applicable.~~

~~ITEM 18. FINANCIAL STATEMENTS~~

~~See the list of financial statements beginning on page F-1 which are filed as part of the annual report on Form 20-F.~~

~~ITEM 19. EXHIBITS~~



~~Number~~		~~Description~~

~~1.1~~		Certificate of registration of our company, registered as of January 3, 2013*

~~1.2~~		Second Amended and Restated Limited Partnership Agreement of our company, dated August 8, 2013***

~~1.3~~		First Amendment to the Second Amended and Restated Limited Partnership Agreement of our company, dated November 5, 2015*******

~~4.1~~		Amended and Restated Master Services Agreement by and among Brookfield Asset Management, the Service Recipients and the Service Providers, dated March 3, 2015******

~~4.2~~		Second Amended and Restated Limited Partnership Agreement of the Property Partnership, dated August 8, 2013***

~~4.3~~		Relationship Agreement among our company, the Property Partnership, the Holding Entities, the Service Providers and Brookfield Asset Management, dated April 15, 2013**

~~4.4~~		Registration Rights Agreement between our company and Brookfield Asset Management dated April 10, 2013**

~~4.5~~		Support Agreement, dated March 19, 2014, between Brookfield Property Partners L.P. and Brookfield Office Properties Exchange LP****

~~4.6~~		First Amendment to Second Amended and Restated Limited Partnership Agreement of the Property Partnership dated December 4, 2014*****

~~4.7~~		Guarantee Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014*****

~~4.8~~		Investor Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014*****

~~4.9~~		Refinancing Agreement among Brookfield Asset Management, our company and the Property Partnership dated December 4, 2014********

~~4.10~~		Second Amendment to Second Amended and Restated Limited Partnership Agreement of the Property Partnership dated July 1, 2015*******

~~4.11~~		First Amendment to the Amended and Restated Master Services Agreement by and among Brookfield Asset Management, the Service Recipients and the Service Providers, dated July 1, 2015*******

~~12.1~~		Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*********

~~12.2~~		Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*********

~~13.1~~		Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002*********



~~13.2~~		Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002*********

~~15.1~~		Consent of Deloitte LLP, Independent Registered Public Accounting Firm, relating to the incorporation of the consolidated financial statements of Brookfield Property Partners L.P. into this Annual Report on Form 20-F*********

~~15.2~~		Consent of Deloitte & Touche LLP relating to the incorporation of the consolidated financial statements of GGP Inc. into this Annual Report on Form 20-F*********

~~101.INS~~		XBRL Instance Document*********

~~101.SCH~~		XBRL Taxonomy Extension Schema Document*********

~~101.CAL~~		XBRL Taxonomy Extension Calculation Linkbase Document*********

~~101.DEF~~		XBRL Taxonomy Extension Definition Linkbase Document*********

~~101.LAB~~		XBRL Taxonomy Extension Label Linkbase Document*********

~~101.PRE~~		XBRL Taxonomy Extension Presentation Linkbase Document*********

*		~~Filed as an exhibit to Amendment No. 1 to Registration Statement on Form 20-F on June 12, 2012 and incorporated herein by reference.~~

**		~~Filed as an exhibit to Form 6-K on April 16, 2013 and incorporated herein by reference.~~

~~***~~		~~Filed as an exhibit to Form 6-K on August 8, 2013 and incorporated herein by reference.~~

~~****~~		~~Filed as an exhibit to Form 6-K on March 19, 2014 and incorporated herein by reference.~~

~~*****~~		~~Filed as an exhibit to Form F-4 on December 4, 2014 and incorporated herein by reference.~~

~~******~~		~~Filed as an exhibit to Form 20-F on March 17, 2015 and incorporated herein by reference.~~

~~*******~~		~~Filed as an exhibit to Form 20-F on March 17, 2016 and incorporated herein by reference.~~

~~********~~		~~Filed as an exhibit to Brookfield Asset Management’s Schedule 13D/A filed on December 5, 2014 and incorporated herein by reference.~~

~~*********~~		~~Filed herewith.~~

The registrant hereby agrees to furnish to the SEC at its request copies of long-term debt instruments defining the rights of holders of outstanding long-term debt that are not required to be filed herewith.

~~SIGNATURES~~

~~The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.~~



	~~BROOKFIELD PROPERTY PARTNERS L.P.,~~
	~~by its general partner,~~ ~~BROOKFIELD PROPERTY~~ ~~PARTNERS LIMITED~~

	~~By:~~	~~/s/ Jane Sheere~~
		~~Name: Jane Sheere~~
		~~Title: Secretary~~

~~Date: March 9, 2018~~

~~Index to Financial Statements~~



	~~Page~~

~~Consolidated financial statements of Brookfield Property Partners L.P. as at December 31, 2017 and 2016 and for each of the years in the three-year period ended December 31, 2017~~	~~F-2~~

~~Consolidated financial statements of GGP Inc. as of December 31, 2017 and 2016 and for each of the years in the three-year period ended December 31, 2017~~	~~F-75~~

~~Brookfield Property Partners L.P.~~

~~Consolidated financial statements~~

~~As at December 31, 2017 and 2016 and~~

~~for the years ended December 31, 2017, 2016 and 2015~~

Report of Independent Registered Public Accounting Firm

~~To the Board~~The effectiveness of ~~Directors and Unitholders of Brookfield Property Partners L.P.~~

~~Opinion on the Financial Statements~~

We have audited the accompanying consolidated balance sheets of Brookfield Property Partners L.P. and subsidiaries (the “Partnership”) as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and the supplemental schedule of investment property information (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

~~We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s~~ internal control over financial reporting as of December 31, ~~2017, based on~~2019 has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who have also audited the ~~criteria established~~financial statements of our company, as stated in their reports which are included herein.

Changes in Internal Control ~~- Integrated Framework (2013)~~ ~~issued by the Committee of Sponsoring Organizations of the Treadway Commission and~~

There was no change in our ~~report dated March 9, 2018 expressed an unqualified opinion on the Partnership’s~~ internal control over financial reporting during the year ended December 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTS

ITEM 16B. CODE OF ETHICS

On April 4, 2013, the BPY General Partner adopted a Code of Conduct and Ethics (the “Code”) that applies to the members of the board of directors of the BPY General Partner, our company and any officers or employees of the BPY General Partner. The Code is reviewed and updated annually. We have posted a copy of the Code on our website at bpy.brookfield.com.

ITEM16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The BPY General Partner has retained Deloitte LLP to act as our company’s independent registered public accounting firm.

~~Basis~~The table below summarizes the fees for ~~Opinion~~professional services rendered by Deloitte LLP for the audit of our annual financial statements for the periods ended December 31, 2019 and 2018.



	December 31, 2019				December 31, 2018
(US$ Thousands)	Total		%		Total		%
Audit fees⁽¹⁾	$	10,384	36	%	$	10,769	37	%
Audit-related fees⁽²⁾	17,580		62	%	18,000		62	%
Tax fees⁽³⁾	33		—	%	441		1	%
Other⁽⁴⁾	540		2	%	37		—	%
Total	$	28,537	100	%	$	29,247	100	%


⁽¹⁾	Audit fees include fees for the audit of our annual consolidated financial statements, internal control over financing reporting and interim reviews of the consolidated financial statements included in our quarterly interim reports. This category also includes fees for comfort letters, consents and review of certain documents filed with securities regulatory authorities.


⁽²⁾	Audit-related fees include fees for the audit or review of financial statements for certain of our subsidiaries, including audits of individual properties to comply with lender, joint venture partner or tenant requirements.


⁽³⁾	Tax fees are principally for assistance in tax return preparation and tax advisory services.


⁽⁴⁾	All other fees include fees for certain permissible consulting and advisory services, including assistance with corporate and social responsibility reporting.

The audit committee of the BPY General Partner pre-approves all audit and non-audit services provided to our partnership by Deloitte LLP.

ITEM16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

~~These financial statements~~ITEM16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Under our normal course issuer bid, our company may, during the twelve-month period commencing August 20, 2019 and ending August 19, 2020, purchase on the TSX, the Nasdaq and any alternative Canadian trading system, up to 35,252,769 of our LP Units, representing approximately 10% of our issued and outstanding LP Units. During the year ended December 31, 2019, we purchased 8,270,704 of our LP Units at an average price of $19.11 per unit under our normal course issuer bid.

Under our substantial issuer bid, our company purchased by way of a “modified Dutch auction” 13,981,214 of our LP Units.



As of Dec. 31, 2019
Month	(a) Total number of units purchased	(b) Average price paid per unit		(c) Total number of units purchased as part of publicly announced plans or programs	(d) Maximum number of units that may yet be purchased under the plans or programs
Mar. 2019⁽¹⁾	13,981,214	$	21.00	13,981,214	—
Apr. 2019⁽²⁾	597,826	20.90		597,826	3,520,907
May 2019⁽²⁾	1,349,695	19.32		1,349,695	2,171,212
Jun. 2019⁽²⁾	733,093	18.53		733,093	1,438,119
Jul. 2019⁽²⁾	396,712	18.90		396,712	1,041,407
Aug. 2019⁽²⁾	702,820	18.83		702,820	34,952,769
Sep. 2019⁽²⁾	750,000	19.61		750,000	34,202,769
Oct. 2019⁽²⁾	1,041,067	19.14		1,041,067	33,161,702
Nov.2019⁽²⁾	1,049,491	18.96		1,049,491	32,112,211
Dec. 2019⁽²⁾	1,650,000	18.57		1,650,000	30,462,211
Total	22,251,918			22,251,918


⁽¹⁾	Our company purchased 13,981,214 of our LP Units at a price of $21.00 under the substantial issuer bid, which was announced on February 11, 2019. The offer to purchase our LP Units under the substantial issuer bid expired at 5:00 p.m. on March 25, 2019.


⁽²⁾	Under our normal course issuer bid, our company may, during the twelve-month period commencing August 20, 2019 and ending August 19, 2020, purchase on the TSX, the Nasdaq and any alternative Canadian trading system, approximately 10% of our issued and outstanding LP Units.

ITEM16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

Subject to certain exceptions, Nasdaq permits foreign private issuers to follow home country practice in lieu of Nasdaq’s

corporate governance requirements. Our corporate practices are not materially different from those required of domestic limited

partnerships under the ~~responsibility~~Nasdaq listing standards, except that we follow Bermuda law in respect of approval of equity compensation

plans and material amendments thereto, which only requires approval by the board of directors of the ~~Partnership’s management. Our responsibility~~BPY General Partner, whereas

Nasdaq rules generally require unitholder approval of such plans and amendments.

ITEM16H. MINING SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is ~~to express~~ an ~~opinion on~~operator, of a coal or other mine in the ~~Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and~~United States are required to ~~be independent with respect to the Partnership~~disclose in ~~accordance~~their periodic reports filed with the ~~U.S. federal securities laws~~SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the ~~applicable rules and regulations~~regulation of the ~~Securities~~Federal Mine Safety and ~~Exchange Commission~~Health Administration (the “MSHA”) under the Federal Mine Safety and Health Act of 1977, as amended, (the “Mine Act”). During the ~~PCAOB. Further, we are required to be independent of the Partnership in accordance with the ethical requirements that are relevant to~~fiscal year ended December 31, 2019, our ~~audit of the financial statements in Canada and to fulfill our other ethical responsibilities in accordance with these requirements.~~

We conducted our audits in accordance with the standards of the PCAOB and Canadian generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosurescompany did not have any mines in the ~~financial statements. Our audits also included evaluating~~United States subject to regulation by MSHA under the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~/s/ Deloitte LLP~~

~~Chartered Professional Accountants~~

~~Licensed Public Accountants~~

~~Toronto, Canada~~

~~March 9, 2018~~

Mine Act.

~~We have served as the Partnership's auditor since 2011.~~

Report of Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who have also audited the financial statements of our company, as stated in their reports which are included herein.

Changes in Internal Control

There was no change in our internal control over financial reporting during the year ended December 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTS

ITEM 16B. CODE OF ETHICS

ITEM16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The BPY General Partner has retained Deloitte LLP to act as our company’s independent registered public accounting firm.

The table below summarizes the fees for professional services rendered by Deloitte LLP for the audit of our annual financial statements for the periods ended December 31, 2019 and 2018.



	December 31, 2019				December 31, 2018
(US$ Thousands)	Total		%		Total		%
Audit fees⁽¹⁾	$	10,384	36	%	$	10,769	37	%
Audit-related fees⁽²⁾	17,580		62	%	18,000		62	%
Tax fees⁽³⁾	33		—	%	441		1	%
Other⁽⁴⁾	540		2	%	37		—	%
Total	$	28,537	100	%	$	29,247	100	%


⁽¹⁾	Audit fees include fees for the audit of our annual consolidated financial statements, internal control over financing reporting and interim reviews of the consolidated financial statements included in our quarterly interim reports. This category also includes fees for comfort letters, consents and review of certain documents filed with securities regulatory authorities.


⁽²⁾	Audit-related fees include fees for the audit or review of financial statements for certain of our subsidiaries, including audits of individual properties to comply with lender, joint venture partner or tenant requirements.


⁽³⁾	Tax fees are principally for assistance in tax return preparation and tax advisory services.


⁽⁴⁾	All other fees include fees for certain permissible consulting and advisory services, including assistance with corporate and social responsibility reporting.

The audit committee of the BPY General Partner pre-approves all audit and non-audit services provided to our partnership by Deloitte LLP.

ITEM16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

ITEM16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Under our substantial issuer bid, our company purchased by way of a “modified Dutch auction” 13,981,214 of our LP Units.



As of Dec. 31, 2019
Month	(a) Total number of units purchased	(b) Average price paid per unit		(c) Total number of units purchased as part of publicly announced plans or programs	(d) Maximum number of units that may yet be purchased under the plans or programs
Mar. 2019⁽¹⁾	13,981,214	$	21.00	13,981,214	—
Apr. 2019⁽²⁾	597,826	20.90		597,826	3,520,907
May 2019⁽²⁾	1,349,695	19.32		1,349,695	2,171,212
Jun. 2019⁽²⁾	733,093	18.53		733,093	1,438,119
Jul. 2019⁽²⁾	396,712	18.90		396,712	1,041,407
Aug. 2019⁽²⁾	702,820	18.83		702,820	34,952,769
Sep. 2019⁽²⁾	750,000	19.61		750,000	34,202,769
Oct. 2019⁽²⁾	1,041,067	19.14		1,041,067	33,161,702
Nov.2019⁽²⁾	1,049,491	18.96		1,049,491	32,112,211
Dec. 2019⁽²⁾	1,650,000	18.57		1,650,000	30,462,211
Total	22,251,918			22,251,918


⁽¹⁾	Our company purchased 13,981,214 of our LP Units at a price of $21.00 under the substantial issuer bid, which was announced on February 11, 2019. The offer to purchase our LP Units under the substantial issuer bid expired at 5:00 p.m. on March 25, 2019.


⁽²⁾	Under our normal course issuer bid, our company may, during the twelve-month period commencing August 20, 2019 and ending August 19, 2020, purchase on the TSX, the Nasdaq and any alternative Canadian trading system, approximately 10% of our issued and outstanding LP Units.

ITEM16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

Subject to certain exceptions, Nasdaq permits foreign private issuers to follow home country practice in lieu of Nasdaq’s

corporate governance requirements. Our corporate practices are not materially different from those required of domestic limited

partnerships under the Nasdaq listing standards, except that we follow Bermuda law in respect of approval of equity compensation

plans and material amendments thereto, which only requires approval by the board of directors of the BPY General Partner, whereas

Nasdaq rules generally require unitholder approval of such plans and amendments.

ITEM16H. MINING SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration (the “MSHA”) under the Federal Mine Safety and Health Act of 1977, as amended, (the “Mine Act”). During the fiscal year ended December 31, 2019, our company did not have any mines in the United States subject to regulation by MSHA under the Mine Act.

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

See the list of financial statements beginning on page F-1 which are filed as part of the annual report on Form 20-F.

ITEM 19. EXHIBITS



Number		Description

1.1		Certificate of registration of our company, registered as of January 3, 2013⁽¹⁾

1.2		Second Amended and Restated Limited Partnership Agreement of our company, dated August 8, 2013⁽²⁾

1.3		First Amendment to the Second Amended and Restated Limited Partnership Agreement of our company, dated November 5, 2015⁽³⁾

1.4		Second Amendment to the Second Amended and Restated Limited Partnership Agreement of our company, dated March 21, 2019⁽⁴⁾

1.5		Third Amendment to the Second Amended and Restated Limited Partnership Agreement of our company, dated August 20, 2019⁽⁵⁾

1.6		Fourth Amendment to the Second Amended and Restated Limited Partnership Agreement of our company, dated February 18, 2020⁽⁶⁾

2.1		Description of Securities⁽¹³⁾

4.1		Second Amended and Restated Master Services Agreement by and among Brookfield Asset Management, the Service Recipients and the Service Providers, dated August 27, 2018⁽⁷⁾

4.2		Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership, dated February 20, 2019⁽⁸⁾

4.3		First Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership, dated March 21, 2019⁽⁴⁾

4.4		Second Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership, dated April 28, 2019⁽⁹⁾

4.5		Third Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership, dated August 20, 2019⁽⁵⁾

4.6		Fourth Amendment to the Fourth Amended and Restated Limited Partnership Agreement of the Property Partnership, dated February 18, 2020⁽⁶⁾



4.7		Relationship Agreement among our company, the Property Partnership, the Holding Entities, the Service Providers and Brookfield Asset Management, dated April 15, 2013⁽¹⁰⁾

4.8		Registration Rights Agreement between our company and Brookfield Asset Management dated April 10, 2013⁽¹⁰⁾

4.9		Support Agreement, dated March 19, 2014, between Brookfield Property Partners L.P. and Brookfield Office Properties Exchange LP⁽¹¹⁾

4.10		Guarantee Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014⁽¹²⁾

4.11		Investor Agreement between our company and the Class A Preferred Unitholder dated December 4, 2014⁽¹²⁾

12.1		Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002⁽¹³⁾

12.2		Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002⁽¹³⁾

13.1		Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002⁽¹³⁾

13.2		Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002⁽¹³⁾

15.1		Consent of Deloitte LLP, Independent Registered Public Accounting Firm, relating to the incorporation of the consolidated financial statements of Brookfield Property Partners L.P. into this Annual Report on Form 20-F⁽¹³⁾

101.INS		XBRL Instance Document⁽¹³⁾

101.SCH		XBRL Taxonomy Extension Schema Document⁽¹³⁾

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document⁽¹³⁾

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document⁽¹³⁾

101.LAB		XBRL Taxonomy Extension Label Linkbase Document⁽¹³⁾

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document⁽¹³⁾

⁽¹⁾		Filed as an exhibit to Amendment No. 1 to Registration Statement on Form 20-F on June 12, 2012 and incorporated herein by reference.

⁽²⁾		Filed as an exhibit to Form 6-K on August 8, 2013 and incorporated herein by reference.

⁽³⁾		Filed as an exhibit to Form 20-F on March 17, 2016 and incorporated herein by reference.



⁽⁴⁾		Filed as an exhibit to Form 6-K on March 21, 2019 and incorporated herein by reference

⁽⁵⁾		Filed as an exhibit to Form 6-K on August 20, 2019 and incorporated herein by reference.

⁽⁶⁾		Filed as an exhibit to Form 6-K on February 18, 2020 and incorporated herein by reference

⁽⁷⁾		Filed as an exhibit to Form 6-K on August 28, 2018 and incorporated herein by reference.

⁽⁸⁾		Filed as an exhibit to Form 6-K on February 20, 2019 and incorporated herein by reference.

⁽⁹⁾		Filed as an exhibit to Form 6-K on April 30, 2019 and incorporated herein by reference.

⁽¹⁰⁾		Filed as an exhibit to Form 6-K on April 16, 2013 and incorporated herein by reference.

⁽¹¹⁾		Filed as an exhibit to Form 6-K on March 19, 2014 and incorporated herein by reference.

⁽¹²⁾		Filed as an exhibit to Form 6-K on December 4, 2014 and incorporated herein by reference.

⁽¹³⁾		Filed herewith.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.



	BROOKFIELD PROPERTY PARTNERS L.P.,
	by its general partner, BROOKFIELD PROPERTY PARTNERS LIMITED

	By:	/s/ Jane Sheere
		Name: Jane Sheere
		Title: Secretary

Date: February 28, 2020

Index to Financial Statements



	Page

Consolidated financial statements of Brookfield Property Partners L.P. as at December 31, 2019 and 2018 and for each of the years in the three-year period ended December 31, 2019	F-2

Brookfield Property Partners L.P.

Consolidated financial statements

As at December 31, 2019 and 2018 and

for the years ended December 31, 2019, 2018 and 2017

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and ~~Unitholders~~unitholders of Brookfield Property Partners L.P.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Brookfield Property Partners L.P. and subsidiaries (the "Partnership") as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the supplemental schedule of investment property information (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2019 and 2018, and its financial performance and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2020 expressed an unqualified opinion on the Partnership's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of Investment Property - Refer to Notes 2(e), 2(v)(v) and 5 to the financial statements

Critical Audit Matter Description

The Partnership has elected the fair value model for all investment properties and accordingly measures all investment properties at fair value subsequent to initial recognition on the balance sheet. The fair value of investment properties is generally determined by management, with substantially all of the investment properties valued using one of two accepted income approaches.

While there are several assumptions that are required to determine the fair value of an investment property, the judgments with the highest degree of subjectivity and impact on fair values are future expected market rents, discount rates and terminal capitalization rates. Auditing these estimates and assumptions of certain investment properties required a high degree of auditor judgment as the estimations made by management contains significant measurement uncertainty. This resulted in the need to involve a fair value specialist.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the future expected market rents, discount rates and terminal capitalization rates used to determine the fair value of certain investment properties included the following, among others:

Evaluated the effectiveness of controls over management’s process for determining the fair value of investment properties including those over the forecasts of future expected market rents, discount rates and terminal capitalization rates.

Evaluated the reasonableness of management’s forecast of future expected market rents by comparing management’s forecasts with historical results, internal communications to management and the Board of Directors and contractual information, where applicable.

With the assistance of a fair value specialist, evaluated the reasonableness of management’s forecast of future expected market rents, discount rates and terminal capitalization rates by considering recent market transactions and industry surveys.

/s/Deloitte LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Canada

February 28, 2020

We have served as the Partnership's auditor since 2011.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and unitholders of Brookfield Property Partners L.P.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Brookfield Property Partners L.P. and subsidiaries (the “Partnership”) as of December 31, ~~2017,~~2019, based on criteria established in Internal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) ~~and Canadian generally accepted auditing standards,~~, the consolidated financial statements as of and for the year ended December 31, ~~2017~~2019 of the Partnership and our report dated ~~March 9, 2018,~~February 28, 2020, expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Manufactured Housing for which control was acquired on March 9, 2017, Toronto Hotel for which control was acquired on October 17, 2017, Houston Center for which control was acquired on December 1, 2017, Mumbai Office Portfolio for which control was acquired on December 7, 2017 and Towers @ 2^nd for which control was acquired on December 8, 2017, and whose financial statements constitute 5% and 4% of total and net assets, respectively, 4% of total revenue and 3% of net income as of and for the year ended December 31, 2017. Accordingly, our audit did not include the internal control over financial reporting at Manufactured Housing, Toronto Hotel, Houston Center, Mumbai Office Portfolio and Towers @ 2^nd.

Basis for Opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with ~~International Financial Reporting Standards as issued by the International Accounting Standards Board.~~generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with ~~International Financial Reporting Standards as issued by the International Accounting Standards Board,~~generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/Deloitte LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Canada

~~March 9, 2018~~February 28, 2020

Brookfield Property Partners L.P.

Consolidated Balance Sheets


(US$ Millions)	Note	Dec. 31, 2017		Dec. 31, 2016		Note	Dec. 31, 2019		Dec. 31, 2018
Assets
Non-current assets
Investment properties	5	$	51,357	$	48,784	5	$	75,511	$	80,196
Equity accounted investments	7	19,761		16,844		7	20,764		22,698
Participating loan interests	9	517		471		9	—		268
Property, plant and equipment	10	5,457		5,357		10	7,278		7,506
Goodwill	11	1,079		761		11	1,041		1,109
Intangible assets	12	1,188		1,141		12	1,162		1,179
Other non-current assets	13	898		500		13	2,326		1,856
Loans and notes receivable		178		71			272		594
		80,435		73,929
Total non-current assets							108,354		115,406
Current assets
Loans and notes receivable		7		2			57		461
Accounts receivable and other	14	981		2,593		14	1,407		2,361
Cash and cash equivalents		1,491		1,456			1,438		3,288
		2,479		4,051
Total current assets							2,902		6,110
Assets held for sale	15	1,433		147		15	387		1,004
Total assets		$	84,347	$	78,127		$	111,643	$	122,520

Liabilities and equity
Non-current liabilities
Debt obligations	16	$	30,749	$	28,423	16	$	46,565	$	57,937
Capital securities	17	2,839		3,801		17	3,000		2,865
Other non-current liabilities	19	918		1,011		19	2,162		2,294
Deferred tax liabilities	18	2,888		2,455		18	2,515		2,378
		37,394		35,690
Total non-current liabilities							54,242		65,474
Current liabilities
Debt obligations	16	6,135		5,096		16	8,825		5,874
Capital securities	17	1,326		370		17	75		520
Accounts payable and other liabilities	20	3,052		2,749		20	3,426		3,749
		10,513		8,215
Total current liabilities							12,326		10,143
Liabilities associated with assets held for sale	15	1,316		61		15	140		163
Total liabilities		49,223		43,966			66,708		75,780

Equity
Limited partners	21	7,395		7,536		21	13,274		12,353
General partner	21	6		6		21	4		4
Preferred equity						21	420		—
Non-controlling interests attributable to:
Redeemable/exchangeable and special limited partnership units	21,22	14,500		14,523		21,22	13,200		12,740
Limited partnership units of Brookfield Office Properties Exchange LP	21,22	285		293		21,22	87		96
FV LTIP units of the Operating Partnership						21,22	35		—
Class A shares of Brookfield Property REIT Inc. (“BPR”)						21,22	1,930		3,091
Interests of others in operating subsidiaries and properties	6,22	12,938		11,803		6,22	15,985		18,456
Total equity		35,124		34,161			44,935		46,740
Total liabilities and equity		$	84,347	$	78,127		$	111,643	$	122,520

See accompanying notes to the consolidated financial statements.

Brookfield Property Partners L.P.

Consolidated Statements of Income


(US$ Millions, except per unit information) Years ended Dec. 31,	Note	2017		2016			2015		Note	2019		2018		2017
Commercial property revenue	23	$	4,192	$	3,624		$	3,216	23	$	5,691	$	5,043	$	4,192
Hospitality revenue		1,648		1,561			1,276		24	1,909		1,913		1,648
Investment and other revenue	24	295		167			361		25	603		283		295
Total revenue		6,135		5,352			4,853			8,203		7,239		6,135
Direct commercial property expense	25	1,617		1,394			1,281		26	1,967		1,851		1,617
Direct hospitality expense	26	1,079		1,036			902		27	1,219		1,236		1,079
Investment and other expense		138		1			135			82		26		138
Interest expense		1,967		1,681			1,528			2,924		2,464		1,967
Depreciation and amortization	27	275		240			180		28	341		308		275
General and administrative expense	28	614		569			559		29	882		1,032		614
Total expenses		5,690		4,921			4,585			7,415		6,917		5,690
Fair value gains, net	29	1,254		692			2,007		30	596		2,466		1,254
Share of net earnings from equity accounted investments	7	961		1,019			1,591		7	1,969		947		961
Income before income taxes		2,660		2,142			3,866			3,353		3,735		2,660
Income tax expense (benefit)	18	192		(575		)	100
Income tax expense									18	196		81		192
Net income		$	2,468	$	2,717		$	3,766		$	3,157	$	3,654	$	2,468

Net income attributable to:
Limited partners		$	136	$	660		$	1,064		$	884	$	764	$	136
General partner		—		—			1			—		—		—
Non-controlling interests attributable to:
Redeemable/exchangeable and special limited partnership units		233		1,103			1,789			896		1,085		233
Limited partnership units of Brookfield Office Properties Exchange LP		6		30			61			6		17		6
FV LTIP units of the Operating Partnership										1		—		—
Class A shares of Brookfield Property REIT Inc.										169		112		—
Interests of others in operating subsidiaries and properties		2,093		924			851			1,201		1,676		2,093
		$	2,468	$	2,717		$	3,766
Total										$	3,157	$	3,654	$	2,468

Net income per LP Unit:
Basic	21	$	0.48	$	2.30		$	3.72	21	$	1.89	$	2.28	$	0.48
Diluted	21	$	0.48	$	2.25		$	3.60	21	$	1.89	$	2.26	$	0.48

See accompanying notes to the consolidated financial statements.

Brookfield Property Partners L.P.

Consolidated Statements of Comprehensive Income


(US$ Millions) Years ended Dec. 31,	Note	2017			2016			2015			Note	2019			2018			2017
Net income		$	2,468		$	2,717		$	3,766			$	3,157		$	3,654		$	2,468
Other comprehensive income (loss)	31										32
Items that may be reclassified to net income:
Foreign currency translation		654			(312		)	(831		)		63			(788		)	654
Cash flow hedges		77			(36		)	(35		)		21			34			77
Available-for-sale securities		(5		)	5			1
Available-for-sale securities (“AFS”)												—			—			(5		)
Equity accounted investments		11			(6		)	(111		)		(50		)	(8		)	11
Items that will not be reclassified to net income:
Securities - fair value through other comprehensive income (“FVTOCI”)												(7		)	(2		)	—
Share of revaluation surplus on equity accounted investments		58			13			161				16			92			58
Remeasurement of defined benefit obligations		(1		)	—			—				(1		)	2			(1		)
Revaluation surplus		86			90			134				281			254			86
Total other comprehensive income (loss)		880			(246		)	(681		)		323			(416		)	880
Total comprehensive income		$	3,348		$	2,471		$	3,085			$	3,480		$	3,238		$	3,348
Comprehensive income attributable to:
Limited partners
Net income		$	136		$	660		$	1,064			$	884		$	764		$	136
Other comprehensive income (loss)		183			(112		)	(143		)		74			(178		)	183
		319			548			921				958			586			319
General partner
Net income		—			—			1				—			—			—
Other comprehensive income (loss)		—			—			—				—			—			—
		—			—			1				—			—			—
Non-controlling interests
Redeemable/exchangeable and special limited partnership units
Net income		233			1,103			1,789				896			1,085			233
Other comprehensive income (loss)		312			(187		)	(240		)		74			(252		)	312
		545			916			1,549				970			833			545
Limited partnership units of Brookfield Office Properties Exchange LP	Limited partnership units of Brookfield Office Properties Exchange LP										Limited partnership units of Brookfield Office Properties Exchange LP
Net income		6			30			61				6			17			6
Other comprehensive income (loss)		8			(5		)	(8		)		1			(4		)	8
		14			25			53				7			13			14
FV LTIP units of the Operating Partnership
Net income												1			—			—
Other comprehensive income (loss)												—			—			—
												1			—			—
Class A shares of Brookfield Property REIT Inc.
Net income												169			112			—
Other comprehensive income (loss)												14			(26		)	—
												183			86			—
Interests of others in operating subsidiaries and properties
Net income		2,093			924			851				1,201			1,676			2,093
Other comprehensive income (loss)		377			58			(290		)		160			44			377
		2,470			982			561				1,361			1,720			2,470
Total comprehensive income		$	3,348		$	2,471		$	3,085			$	3,480		$	3,238		$	3,348

On August 3, ~~2017, GGP~~2018, the partnership acquired a 100% leasehold interest in ~~2 anchor boxes at Neshaminy Mall and Oakwood Center located~~660 Fifth Avenue, a commercial office asset in ~~Bensalem, Pennsylvania and Gretna, Louisiana, respectively. The gross~~New York, for consideration of $1,299 million. During 2019, the ~~2 acquired anchor boxes~~partnership completed the purchase price allocation for 660 Fifth Avenue. No material changes were made to the provisional purchase price allocation. This portfolio was ~~$21.4 million.~~

On September 19, 2017, GGP entered into three transactions with affiliates of Thor Equities (“Thor”) related to three separate joint ventures between GGP and Thor. First, GGP acquired 49.9% of its partner's interest in 218 West 57th Street baseddeconsolidated by the partnership on a gross property valuation of $104.0 million. After the acquisition, GGP owned a 99.9% interest in 218 West 57th Street, while Thor retained a 0.1% interest. A portion of the net proceeds from the acquisition were used by Thor to pay off their $12.3 million note

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~January 31, 2019. See Note 5, Investment Properties for further information.

~~receivable~~

On December 7, 2018, the partnership acquired all of the outstanding common shares of Forest City Realty Trust Inc. (“Forest City”), a publicly traded company which owns a portfolio of office, multifamily and mixed-use assets across the U.S, for consideration of $6,948 million. During 2019, the partnership finalized the review over the fair value of the investment properties and property debt obligations as at the acquisition date and recognized an opening equity adjustment of $549 million that mostly consisted of a bargain purchase gain. The bargain purchase gain was reflecting the discount to ~~GGP related~~net asset value of the previously publicly traded shares of Forest City. No other material changes were made to the ~~property. Of~~provisional purchase price allocation. This portfolio was deconsolidated by the ~~remaining net proceeds, $9.75 million was used by Thor to pay down a portion of their note receivable to GGP~~partnership on January 31, 2019. See Note 5, Investment Properties for ~~530 Fifth Avenue and $3.36 million was used to pay down a portion of their note receivable to GGP for 685 Fifth Avenue (Note 14).~~further information.

Second, GGP recapitalized the 530 Fifth Avenue joint venture based on a gross property valuation of $334 million, whereby upon closing (i) Thor’s common interest having a value of $48.1 million was converted to a preferred equity interest with a 7.0% cumulative return in 530 Fifth Avenue, which serves as collateral for Thor's still-outstanding note receivable, and (ii) GGP owns a 90.23% common equity interest in 530 Fifth Avenue, while Thor retained a 9.77% common equity interest. The preferred return payable to Thor must first go toward interest and principal due to GGP under Thor’s note receivable for 530 Fifth Avenue (Note 14).

Finally, GGP also recapitalized the 685 Fifth Avenue joint venture based on a gross property valuation of $652.6 million, whereby upon closing (i) Thor’s common interest having a value of $150 million was converted to a preferred equity interest with a 7.0% cumulative return in 685 Fifth Avenue, which serves as collateral for Thor's still-outstanding note receivable, and (ii) GGP owns a 97.03% common equity interest in 685 Fifth Avenue, while Thor retained a 2.97% common equity interest. The preferred return payable to Thor must first go toward interest and principal due to GGP under Thor’s note receivable for 685 Fifth Avenue (Note 14). The recapitalization was effective on December 31, 2017, however, Thor executed a power of attorney on September 19, 2017 granting GGP the power to direct the management of the joint venture and the property.

GGP had previously accounted for our interest in these three joint ventures using the equity method of accounting (Note 2). As a result of the transactions described above, we now consolidate these joint ventures with our joint venture partner's share of equity included in noncontrolling interest (Note 2). In addition, the $48.1 million and $151.3 million notes receivable due from our joint venture partner at 530 Fifth Avenue and 685 Fifth Avenue, respectively, are presented on the balance sheet in noncontrolling interests in Consolidated Real Estate Affiliates. The notes receivable are presented as contra-equity amount offset with our joint venture partners' noncontrolling interest.

The ~~table below summarizes~~partnership also completed several individually immaterial business combinations during 2018 for total consideration of $3,948 million. The acquisitions were primarily LP Investments made by Brookfield-sponsored real estate funds to invest the ~~gain from changes in~~funds’ capital. The partnership consolidates the acquired investments as Brookfield Asset Management’s power as general partner, together with the partnership’s LP interests, provide the partnership with control ~~calculation ($ in millions):~~over the investments. As noted above, 660 Fifth Avenue and Forest City were deconsolidated by the partnership on January 31, 2019. See Note 5,

Investment Properties for further information.

Gain from changes in control for 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue
Fair value of Investment in Unconsolidated Real Estate Affiliates as of change in control $ 250.0
Less: carrying value of Investment in Unconsolidated Real Estate Affiliates 198.1
Gain from changes in control of investment properties and other, net 51.9

The following table summarizes the ~~allocation~~amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed in addition to the consideration and transaction costs incurred:



(US$ Millions)	Extended- Stay Hotel Portfolio			UK Student Housing IV			660 Fifth Avenue⁽³⁾			Forest City⁽³⁾			Other			Total
Date of acquisition	2/1/2018			2/1/2018			8/3/2018			12/7/2018			Various
Investment properties	$	—		$	742		$	1,292		$	9,409		$	3,846		$	15,289
Property, plant and equipment	768			2			—			—			922			1,692
Equity accounted investments	5			—			—			1,479			79			1,563
Goodwill	—			—			—			—			96			96
Intangible assets	—			—			—			—			54			54
Accounts receivable and other	2			53			11			935			944			1,945
Cash and cash equivalents	2			18			—			487			168			675
Total assets	777			815			1,303			12,310			6,109			21,314
Less:
Debt obligations	—			—			—			(3,504		)	(1,504		)	(5,008		)
Accounts payable and other	(13		)	(63		)	(4		)	(700		)	(283		)	(1,063		)
Deferred tax liabilities	—			—			—			—			(47		)	(47		)
Non-controlling interests⁽¹⁾	—			—			—			(609		)	(88		)	(697		)
Net assets acquired	$	764		$	752		$	1,299		$	7,497		$	4,187		$	14,499
Consideration⁽²⁾	$	764		$	752		$	1,299		$	6,948		$	3,948		$	13,711
Transaction costs	$	9		$	7		$	44		$	202		$	67		$	329


⁽¹⁾	Includes non-controlling interests recognized on business combinations measured as the proportionate share of the fair value of the assets, liabilities and contingent liabilities on the date of acquisition.


⁽²⁾	Includes consideration paid with funds received from issuance of non-controlling interests to certain institutional investors in funds sponsored by Brookfield Asset Management.


⁽³⁾	These investments were deconsolidated by the partnership on January 31, 2019. See Note 5, Investment Properties for further information.

Excluding the acquisition of GGP, in the period from each acquisition date to December 31, 2018, the partnership recorded revenue and net income in connection with these acquisitions of approximately $529 million and $163 million, respectively. If the acquisitions had occurred on January 1, 2018, the partnership’s total revenue and net income would have been $8,572 million and $4,133 million, respectively, for the twelve months ended December 31, 2018.

Transaction costs, which primarily relate to legal and consulting fees, are expensed as incurred in accordance with IFRS 3 and included in general and administrative expense on the consolidated income statement.

NOTE 4. ACQUISITION OF GGP INC.

On March 26, 2018, the partnership entered into a definitive merger agreement with GGP to acquire all of the outstanding common shares of GGP other than those shares already held by the partnership and its subsidiaries. Under the terms of the agreement, GGP common shareholders had the right to elect to receive, for each GGP share, subject to proration, (i) $23.50 in cash or (ii) either one BPY unit or one BPR Unit, a new U.S. REIT security formed by recapitalizing GGP and amending its governing documents. Each BPR Unit is structured to provide an economic return equivalent to a LP Unit. The holder of a BPR Unit has the right, at any time, to request the share be redeemed for the cash equivalent to the value of a LP Unit. In the event the holder of a BPR Unit exercises this right, the partnership has the right, at its sole discretion, to satisfy the redemption request with a LP Unit rather than cash.

On July 26, 2018, GGP shareholders approved the merger which closed on August 28, 2018. On closing the partnership controlled BPR as it held 87% of the voting stock of BPR through its 100% ownership of the BPR Class B and Class C shares. The balance of the voting rights in respect of BPR are held by the holders of the BPR Units.

Based on shareholder elections, which were subject to proration, cash totaling $9.05 billion was paid by GGP to its shareholders, other than the partnership, in the form of a pre-closing dividend on August 27, 2018. According to the terms of the agreement, the consideration payable on close of the merger was reduced by the amount of the pre-closing dividend. The pre-closing dividend was funded with new term debt, property-level refinancings, proceeds from the sale of partial interests in certain GGP properties and the issuance of non-controlling interests in subsidiaries of GGP.

The acquisition of GGP was accounted for as a business combination achieved in stages. The partnership’s existing equity interest in GGP was remeasured to fair value immediately prior to the acquisition date of August 28, 2018 based on the partnership’s

interest in the fair value of the identifiable net assets and liabilities of GGP at the time. As a result of this remeasurement, a loss of approximately $502 million was recognized in fair value gains, net.

Consideration paid on acquisition of control by the partnership was comprised of the following:

88 million LP Units with a fair value of $1,786 million determined with reference to the trading price of the LP Units on the closing date;

161 million BPR Units with a fair value of $3,383 million determined with reference to the initial trading price of the BPR Unit;

Cash consideration of $200 million; and

Share-based payment awards to GGP employees with a fair value of $28 million.

As discussed in Note 21, Equity, the BPR Units issued on closing represent a non-controlling interest in the partnership.

During 2019, the partnership completed the purchase price allocation for GGP. No material changes were made to the ~~net~~provisional purchase price allocation.

The following table summarizes the amounts recognized as of the acquisition date for each major class of assets acquired atand liabilities assumed in addition to the consideration paid and transaction costs incurred:



(US$ Millions)	GGP
Investment properties	$	17,991
Equity accounted investments	10,829
Property, plant and equipment	56
Accounts receivable and other	592
Cash and cash equivalents	424
Total assets	29,892
Less:
Debt obligations	(13,147		)
Accounts payable and other	(691		)
Deferred tax liabilities	(11		)
Non-controlling interests⁽¹⁾	(1,882		)
Net assets acquired	$	14,161
Consideration⁽²⁾	$	13,240
Transaction costs	32


⁽¹⁾	Includes non-controlling interests in a subsidiary of BPR measured as the proportionate share of the fair value of the entity’s net assets on the date of acquisition.


⁽²⁾	Includes the acquisition date fair value of the partnership’s previously held equity interest in GGP of $7,843 million.

In connection with the acquisition of GGP, the partnership has recognized a bargain purchase gain of $921 million in fair value gains, net as the consideration paid exceeds the fair value of the assets acquired, liabilities assumed and non-controlling interests recognized on acquisition. ~~These allocations were based on the relative fair values~~The partnership has determined that it has identified all of the assets acquired and liabilities assumed ~~($ in millions):~~

Allocation of Thor Equities Purchase Price 218 W. 57th Street
530 Fifth Avenue
685 Fifth Avenue
Investment in real estate; including intangible assets and liabilities $ 104.0
$ 334.0
$ 652.6
Fair value of debt (1) (53.0 ) (221.0 ) (340.0 )
Net working capital (2) 0.1
14.3
1.7
Net assets acquired 51.1
127.3
314.3

~~(1) 530 Fifth Avenue includes $31.0 million of an intercompany loan between 530 Fifth Avenue~~ and ~~GGP. 218 W. 57th Street includes $53.0 million of an intercompany loan between 218 W. 57th Street and GGP. Both loans eliminate in consolidation.~~

~~(2) 530 Fifth Avenue includes a $9.4 million escrow for tenant allowances.~~

Capitalization rates and discount rates were based on a reasonable range of current market rates for 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue. Based upon these inputs, we determined that ~~our valuations of the properties using a discounted cash flow or a direct capitalization model were classified within Level 3 of the fair value hierarchy (Note 2).~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~



~~Unobservable Quantitative Input~~		~~Range~~
~~Discount Rates~~		~~6.0% to 7.0%~~
~~Terminal capitalization rates~~		~~4.0% to 5.5%~~

On July 12, 2017, we closed on the acquisition of the remaining 50% interest in 8 of the 12 anchor boxes included in the existing GS Portfolio Holdings LLC ("GSPH") joint venture with Seritage Growth Properties for $190.1 million based on a total valuation of $380.2 million. We had previously owned a 50% interest in the joint venture and accounted for the joint venture using the equity method of accounting (Note 2), but as a result of the transaction we now consolidate our 100% interest in the 8 acquired anchor boxes. Of the total purchase price, $126.4 million was settled upon closing and Seritage retained certain special rights (governed by a Special Rights Agreement), which are callable by GGP for $63.7 million. Simultaneously, the 4 remaining anchor boxes in GSPH were distributed to a newly formed joint venture, GS Portfolio Holdings II, LLC ("GSPHII"), between GGP and Seritage in which the ownership interest remains at 50% for both joint venture partners. We account for GSPHII using the equity method of accounting (Note 2). In addition, GGPLP provided a loan to GSPHII for $127.4 million. This loaneach is collateralized by GSPHII's interest in the properties (Note 14). Finally, GGP acquired a 50% interest in 5 additional anchor boxes through a newly formed joint venture, GS Portfolio Holdings 2017 ("GSPH2017"), for $57.5 million. We account for this joint venture using the equity method of accounting (Note 2).

appropriately measured. The ~~table below summarizes the gain from changes in control calculation ($ in millions):~~

Gain from a Change of Control in GSPH
Consideration paid to acquire our joint venture partner's interest $ 190.1
Less: carrying value of Investment in Unconsolidated Real Estate Affiliates 147.2
Gain from changes in control of investment properties and other, net 42.9

~~On June 30, 2017, we conveyed Lakeside Mall to the lender in full satisfaction of $144.5 million in outstanding debt. This transaction resulted in a $55.1 million gain on extinguishment of debt.~~

On June 9, 2017, we closed on the acquisition of our joint venture partner's 50% interest in Neshaminy Mall located in Bensalem, Pennsylvania for a purchase price of $32.5 million based on a total valuation of $65.0 million. Post acquisition, we own 100% of the mall. Prior to the acquisition of the remaining interest, the carrying value for our investment was $55.2 million. As a result of this acquisition, the implied fair value of ~~our previous investment in Neshaminy Mall is $34.2 million, resulting in a loss of $21.0 million, recognized in loss from changes in control of~~the investment properties acquired was determined, for certain of the assets, based on transaction prices agreed with third parties for the sale of partial interests and ~~other~~valuation models prepared by an independent external appraiser.

In the period from August 28, 2018 to December 31, 2018, the partnership recorded revenue and net income in connection with this acquisition of approximately $588 million and $360 million, respectively. If the acquisition had occurred on January 1, 2018, the partnership’s total revenue and net income would have been $8,415 million and $4,373 million, respectively, for the year ended December 31, ~~2017.~~2018, only including the GGP transaction.

~~On May 12, 2017, we closed~~

NOTE 5. INVESTMENT PROPERTIES

The following table presents a roll forward of investment property balances for the years ended December 31, 2019 and 2018:



	Year ended Dec. 31, 2019									Year ended Dec. 31, 2018
(US$ Millions)	Commercial properties			Commercial developments			Total			Commercial properties			Commercial developments			Total
Balance, beginning of year	$	76,014		$	4,182		$	80,196		$	48,780		$	2,577		$	51,357
Changes resulting from:
Property acquisitions⁽¹⁾	6,797			246			7,043			31,783			1,658			33,441
Capital expenditures	1,540			1,229			2,769			1,098			1,185			2,283
Accounting policy change⁽²⁾	704			22			726			—			—			—
Property dispositions⁽³⁾	(742		)	(37		)	(779		)	(4,115		)	(451		)	(4,566		)
Fair value gains, net	301			557			858			784			462			1,246
Foreign currency translation	69			72			141			(1,387		)	(121		)	(1,508		)
Transfers between commercial properties and commercial developments	354			(354		)	—			1,123			(1,123		)	—
Impact of deconsolidation due to loss of control⁽⁴⁾	(10,701		)	(798		)	(11,499		)	—			—			—
Reclassifications of assets held for sale and other changes	(2,771		)	(1,173		)	(3,944		)	(2,052		)	(5		)	(2,057		)
Balance, end of year⁽⁵⁾	$	71,565		$	3,946		$	75,511		$	76,014		$	4,182		$	80,196


⁽¹⁾	The prior year primarily includes the commercial properties and developments from the GGP acquisition in 2018.


⁽²⁾	Includes the impact of the adoption of IFRS 16 through the recognition of right-of-use assets. See Note 2, Summary of Significant Accounting Policies for further information.


⁽³⁾	Property dispositions represent the carrying value on date of sale.


⁽⁴⁾	Includes the impact of the deconsolidation of Brookfield Strategic Real Estate Partners III (“BSREP III”) investments. See below for further information.


⁽⁵⁾	Includes right-of-use commercial properties and commercial developments of $720 million and $32 million, respectively, as of December 31, 2019. Current lease liabilities of $38 million has been included in accounts payable and other liabilities and non-current lease liabilities of $714 million have been included in other non-current liabilities.

The partnership determines the fair value of each commercial property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions at the applicable balance sheet dates, less future cash outflows in respect of such leases. Investment property valuations are generally completed by undertaking one of two accepted income approach methods, which include either: i) discounting the expected future cash flows, generally over a term of 10 years including a terminal value based on the application of a capitalization rate to estimated year 11 cash flows; or ii) undertaking a direct capitalization approach whereby a capitalization rate is applied to estimated current year cash flows. Where there has been a recent market transaction for a specific property, such as an acquisition or sale of ~~Red Cliffs Mall~~a partial interest, the partnership values the property on that basis. In determining the appropriateness of the methodology applied, the partnership considers the relative uncertainty of the timing and amount of expected cash flows and the impact such uncertainty would have in ~~St. George, Utah~~arriving at a reliable estimate of fair value. The partnership prepares these valuations considering asset and market specific factors, as well as observable transactions for ~~$39.1 million.~~similar assets. The ~~transaction netted proceeds~~determination of ~~approximately $36.3 million~~fair value requires the use of estimates, which are internally determined and ~~resulted~~compared with market data, third-party reports and research as well as observable conditions. There are currently no known trends, events or uncertainties that the partnership reasonably believes could have a sufficiently pervasive impact across the partnership’s businesses to materially affect the methodologies or assumptions utilized to determine the estimated fair values reflected in ~~a gain on sale~~this report. Discount rates and capitalization rates are inherently uncertain and may be impacted by, among other things, movements in interest rates in the geographies and markets in which the assets are located. Changes in estimates of ~~$5.6 million recognized~~discount and capitalization rates across different geographies and markets are often independent of each other and not necessarily in ~~gain~~the same direction or of the same magnitude. Further, impacts to the partnership’s fair values of commercial properties from changes in discount or capitalization rates and cash flows are usually inversely correlated. Decreases (increases) in the discount rate or capitalization rate result in increases (decreases) of fair value. Such decreases (increases) may be mitigated by decreases (increases) in cash flows included in the valuation analysis, as circumstances that typically give rise to increased interest rates (e.g., strong economic growth, inflation) usually give rise to increased cash flows at the asset level. Refer to the table below for further information on valuation methods used by the partnership for its asset classes.

Commercial developments are also measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. Development sites in the planning phases are measured using comparable market values for similar assets.

In accordance with its policy, the partnership generally measures and records its commercial properties and developments using valuations prepared by management. However, for certain subsidiaries, the partnership relies on quarterly valuations prepared by external valuation professionals. Management compares the external valuations to the partnership’s internal valuations to review

the work performed by the external valuation professionals. Additionally, a number of properties are externally appraised each year and the results of those appraisals are compared to the partnership’s internally prepared values.

2019 Transactions

BSREP III deconsolidation

In the first quarter of 2019, BSREP III held its final close with total equity commitments of $15 billion. Prior to final close, the partnership had committed to 25%, or a controlling interest in the fund and as a result, had previously consolidated the investments made to date. Upon final close, on January 31, 2019, the partnership reduced its commitment to $1 billion, representing a 7% non-voting position. As a result, the partnership lost control and deconsolidated its investment in the fund, which primarily consists of Forest City and 660 Fifth Avenue. The partnership recognizes its investment in BSREP III as a financial asset, initially recognized at fair value and remeasured on each reporting date through fair value gain or loss. As a result of the deconsolidation, investment properties decreased by $11,499 million, equity accounted investments decreased by $1,434 million, property, plant and ~~other~~equipment decreased by $789 million and debt obligations decreased by $13,601 million.

Adoption of IFRS 16

The impact of the January 1, 2019 adoption of IFRS 16 resulted in the recognition of ROU investment properties of $721 million. Fair value loss related to IFRS 16 ROU assets for the year ended December 31, ~~2017.~~

~~On December 1, 2016, we entered into an agreement with a qualified intermediary to acquire 605 N. Michigan Avenue located in Chicago, Illinois. The Company loaned the qualified intermediary $140.0~~2019 was $5 million to acquire the property as replacement property in a reverse 1031 exchange pursuant to the applicable Internal Revenue Service policy. 605 N. Michigan Avenue was deemed to be a variable interest entity for which the Company was deemed to be the primary beneficiary as it has the ability to direct the activities of the entity that most significantly impact its economic performance and has all of the risks and rewards of ownership. Accordingly, the Company consolidated 605 N. Michigan Avenue as. As of December 31, ~~2016.~~ 2019, ROU investment properties was $752 million.

The ~~reverse 1031 exchange was closed out~~key valuation metrics for the partnership’s consolidated commercial properties are set forth in the following tables below on a weighted-average basis:



		Dec. 31, 2019					Dec. 31, 2018
Consolidated properties	Primary valuation method	Discount rate		Terminal capitalization rate		Investment horizon (yrs.)	Discount rate		Terminal capitalization rate		Investment horizon (yrs.)
Core Office
United States	Discounted cash flow	7.0	%	5.6	%	12	6.9	%	5.6	%	12
Canada	Discounted cash flow	5.9	%	5.2	%	10	6.0	%	5.4	%	10
Australia	Discounted cash flow	6.8	%	5.9	%	10	7.0	%	6.2	%	10
Europe	Discounted cash flow	4.6	%	4.1	%	11	—	%	—	%	—
Brazil	Discounted cash flow	7.9	%	7.4	%	10	9.6	%	7.7	%	6
Core Retail	Discounted cash flow	6.7	%	5.4	%	10	7.1	%	6.0	%	12
LP Investments Office	Discounted cash flow	10.0	%	7.3	%	7	10.2	%	7.0	%	6
LP Investments Retail	Discounted cash flow	8.8	%	7.3	%	10	8.9	%	7.8	%	9
Mixed-use	Discounted cash flow	7.6	%	5.4	%	10	7.8	%	5.4	%	10
Logistics⁽¹⁾	Direct capitalization	5.8	%	n/a		n/a	9.3	%	8.3	%	10
Multifamily⁽¹⁾	Direct capitalization	5.1	%	n/a		n/a	4.8	%	n/a		n/a
Triple Net Lease⁽¹⁾	Direct capitalization	6.3	%	n/a		n/a	6.3	%	n/a		n/a
Self-storage⁽¹⁾	Direct capitalization	5.6	%	n/a		n/a	5.7	%	n/a		n/a
Student Housing⁽¹⁾	Direct capitalization	5.8	%	n/a		n/a	5.6	%	n/a		n/a
Manufactured Housing⁽¹⁾	Direct capitalization	5.5	%	n/a		n/a	5.4	%	n/a		n/a


⁽¹⁾	The valuation method used to value multifamily, triple net lease, self-storage, student housing, logistics and manufactured housing properties is the direct capitalization method. The rates presented as the discount rate relate to the overall implied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.

Operating investment properties with a fair value of approximately $14.1 billion (December 31, 2018 - $20.7 billion) are situated on land held under leases or other agreements largely expiring after the year 2065. Investment properties do not include any buildings held under operating leases.

The following table presents the partnership’s investment properties measured at fair value in the consolidated financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined in Note 2(i) above.



	Dec. 31, 2019								Dec. 31, 2018
					Level 3								Level 3
(US$ Millions)	Level 1		Level 2		Commercial properties		Commercial developments		Level 1		Level 2		Commercial properties		Commercial developments
Core Office
United States	$	—	$	—	$	15,213	$	535	$	—	$	—	$	14,415	$	822
Canada	—		—		4,633		173		—		—		4,127		118
Australia	—		—		1,881		419		—		—		2,342		49
Europe	—		—		936		1,931		—		—		137		1,194
Brazil	—		—		361		—		—		—		329		—
Core Retail ⁽¹⁾	—		—		21,561		—		—		—		17,224		383
LP Investments
LP Investments Office⁽¹⁾	—		—		8,054		702		—		—		7,861		577
LP Investments Retail	—		—		2,812		—		—		—		3,408		6
Logistics	—		—		84		10		—		—		183		—
Multifamily	—		—		2,937		—		—		—		4,151		—
Triple Net Lease	—		—		4,508		—		—		—		5,067		—
Self-storage	—		—		991		16		—		—		847		84
Student Housing	—		—		2,445		160		—		—		2,031		386
Manufactured Housing	—		—		2,446		—		—		—		2,369		—
Mixed-Use ⁽¹⁾	—		—		2,703		—		—		—		11,523		563
Total	$	—	$	—	$	71,565	$	3,946	$	—	$	—	$	76,014	$	4,182


⁽¹⁾	Includes the impact of the deconsolidation of BSREP III investments. See above for further information.

There were no transfers between levels within the fair value hierarchy related to investment properties during the years ended December 31, 2019 and 2018. Investment properties with a fair value of $73.2 billion (December 31, 2018 - $73.5 billion) are pledged as security for property debt.

The following table presents a sensitivity analysis to the impact of a 25 basis point movement of the discount rate and terminal capitalization or overall implied capitalization rate on fair values of the partnership’s commercial properties for December 31, 2019, for properties valued using the discounted cash flow or direct capitalization method, respectively:



	Dec. 31, 2019
(US$ Millions)	Impact on fair value of commercial properties
Core Office
United States	$	764
Canada	223
Australia	174
Europe	20
Brazil	13
Core Retail	1,112
LP Investments
LP Investments Office	363
LP Investments Retail	108
Logistics	3
Mixed-use	112
Multifamily	130
Triple Net Lease	160
Self-storage	38
Student Housing	101
Manufactured Housing	107
Total	$	3,428

During the year ended December 31, ~~2017,~~2019, the partnership capitalized a total of $1,229 million (December 31, 2018 - $1,185 million) of costs related to development properties. Included in this amount is $1,125 million (December 31, 2018 - $1,089 million) of construction and ~~the sole membership interests~~related costs and $104 million (December 31, 2018 - $96 million) of ~~the VIE were assigned to us and the respective outstanding loan was extinguished, resulting in the entity being wholly owned by us and no long considered a VIE.~~borrowing costs capitalized. The purchase price allocation was recorded in 2016 using a preliminary estimate of the net assets acquired. Certain amounts were reclassified according to the subsequent purchase price allocation recorded during 2017.

~~On November 1, 2016, Riverchase Galleria (located in Hoover, Alabama) redeemed the 50%~~weighted average interest of our joint venture partner for a gross purchase price of $143.5 million including the assumption of our joint venture partner's $110.3 million share of property level debt. Concurrently, the 50% interest was acquired by our joint venture through certain capital contributions. Our overall ownership in Riverchase Galleria was 75.5% as of December 31, 2016 and 86.3% as of December 31, 2017.

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~The table below summarizes the gain from changes in control calculation ($ in millions):~~

Loss from a Change of Control in Riverchase Galleria
Cash paid to acquire our joint venture partner's interest $ 33.8
Less: carrying value of investment in Riverchase Galleria (78.0 )
Losses from changes in control of investment properties (44.2 )

The following table summarizes the allocation of the purchase price to the net assets acquired at the date of acquisition. These allocations were based on the relative fair values of the assets acquired and liabilities assumed. ($ in millions):

Allocation of the Riverchase Purchase Price
Investment in real estate, including intangible assets and liabilities $ 274.3
Fair value of debt (1) (220.7 )
Net working capital (2) 12.7
Net assets acquired 66.3

~~(1) Debt represents an intercompany loan between Riverchase Galleria and GGP and eliminates in consolidation.~~

~~(2) Includes tax increment financing (TIF) associated with the city of Hoover, Alabama.~~

~~On October 28, 2016, we acquired four Macy's boxes, including the box at Tysons Galleria, at various properties for $45.7 million~~rate used for the ~~purpose~~capitalization of ~~re-tenanting and repositioning space. Subsequently on December 8, 2016, we acquired an additional Macy's box at Stonestown Galleria for $40.7 million.~~

On September 15, 2016, joint ventures we formed with Simon Property Group and Authentic Brands Group LLC ("ABG") acquired Aeropostale, Inc. ("Aeropostale") for $80.0 million in total cash which included cash for working capital requirements of the retail business. The intellectual property and brand related assets were assignedborrowing costs to the Aero IpCo, LLC venture ("IPCO") and the assets and liabilities necessary to run the stores were assigned to the Aero OpCo, LLC venture ("OPCO"). In connection with the transaction, our total investment was $20.4 million of cash contributed to the ventures for an effective ownership of approximately 26% in the two joint ventures. Aeropostale is a tenant at certaindevelopment properties for which we receive rental income included in minimum rents on the Consolidated Statements of Operations and Comprehensive Income. On December 29, 2017, we sold approximately 54% of our interest in IPCO to ABG for a sales price of $16.6 million, which resulted in a gain of $12.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, ~~2017. In addition, we invested $30.5 million in ABG units. The investment~~2019 is ~~considered a cost method investment and is included in investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.~~3.7% (December 31, 2018 - 4.2%).

On August 1, 2016, we closed on the sale of Rogue Valley Mall located in Medford, Oregon for a sales price of $61.5 million. This transaction netted proceeds of approximately $6.4 million and resulted in a loss of $1.0 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.

On July 29, 2016, we reached an agreement on the sale of a 50% interest in Fashion Show located in Las Vegas, Nevada to TIAA-CREF Global Investments, LLC ("TIAACREF") for a sales price of $1.25 billion. We closed on the sale of the initial 49% and received proceeds of approximately $813.9 million on July 29, 2016, and we received the remaining $16.6 million for the closing of the final 1% interest on October 4, 2016. This transaction resulted in a gain on sale of $634.9 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.NOTE 6. INVESTMENTS IN SUBSIDIARIES

The partnership considers all relevant facts and circumstances in determining that its decision making rights over the entities listed below are sufficient to give it power over these subsidiaries. In addition, the partnership has exposure and rights to substantial variable returns from its economic interests in these subsidiaries, even after consideration of material non-controlling interests in certain subsidiaries. The partnership is able to use its power to affect the amount of its returns and consolidates these subsidiaries.

The following table ~~below summarizes~~presents the ~~gain calculation ($ in millions):~~partnership’s material subsidiaries as of December 31, 2019 and 2018:



	Jurisdiction of formation	Economic interest				Voting interest
	Jurisdiction of formation	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2018
Subsidiary of the partnership
Brookfield Property L.P^.(1)	Bermuda	50	%	49	%	100	%	100	%
Holding entities of the operating partnership
BPY Bermuda IV Holdings L.P.	Delaware	100	%	100	%	100	%	100	%
Brookfield BPY Retail Holdings II Inc.	Ontario	100	%	100	%	100	%	100	%
BPY Bermuda Holdings Limited	Bermuda	100	%	100	%	100	%	100	%
BPY Bermuda Holdings II Limited	Bermuda	100	%	100	%	100	%	100	%
Brookfield BPY Holdings Inc.	Ontario	100	%	100	%	100	%	100	%
BPY Bermuda Holdings IV Limited	Bermuda	100	%	100	%	100	%	100	%
BPY Bermuda Holdings IA Limited	Bermuda	100	%	100	%	100	%	100	%
BPY Bermuda Holdings V Limited	Bermuda	100	%	100	%	100	%	100	%
BPY Bermuda Holdings VI Limited	Bermuda	100	%	100	%	100	%	100	%
BPY Bermuda Holdings VII Limited	Bermuda	100	%	—	%	100	%	—	%
Real estate subsidiaries of the holding entities
Brookfield Office Properties Inc. (“BPO”)	Canada	100	%	100	%	100	%	100	%
Brookfield BPY Holdings (Australia) ULC⁽²⁾	Canada	100	%	100	%	—	%	—	%
Forest City⁽⁴⁾	United States	—	%	15	%	—	%	—	%
BPR Retail Holdings LLC⁽⁵⁾	United States	100	%	100	%	95	%	91	%
BSREP CARS Sub-Pooling LLC⁽³⁾	United States	29	%	29	%	—	%	—	%
Center Parcs UK⁽³⁾	United Kingdom	27	%	27	%	—	%	—	%
BSREP II Aries Pooling LLC⁽³⁾	United States	26	%	26	%	—	%	—	%
BSREP UA Holdings LLC⁽³⁾	Cayman Islands	30	%	30	%	—	%	—	%
BSREP India Office Holdings Pte. Ltd.⁽³⁾	United States	33	%	33	%	—	%	—	%
BSREP II Retail Upper Pooling LLC⁽³⁾	United States	50	%	50	%	33	%	33	%
BSREP II Korea Office Holdings Pte. Ltd.⁽³⁾	South Korea	22	%	22	%	—	%	—	%
BSREP II PBSA Ltd.⁽³⁾	Bermuda	25	%	25	%	—	%	—	%
BSREP II MH Holdings LLC⁽³⁾	United States	26	%	26	%	—	%	—	%


⁽¹⁾	BPY holds all managing general partner units of the operating partnership and therefore has the power to direct the relevant activities and affairs of the operating partnership. The managing general partner units represent 50% and 49% of the total number of the operating partnership’s units at December 31, 2019 and 2018, respectively.


⁽²⁾	This entity holds certain Australian properties not held through BPO.


⁽³⁾	The partnership holds its economic interest in these assets primarily through limited partnership interests in Brookfield-sponsored real estate funds. By their nature, limited partnership interests do not have any voting rights. The partnership has entered into voting agreements to provide the partnership with the ability to contractually direct the relevant activities of the investees.


⁽⁴⁾	Included non-controlling interests in recently acquired Forest City portfolio in 2018.The partnership deconsolidated Forest City on January 31, 2019. See Note 5, Investment Properties for further information.

⁽⁵⁾

The partnership obtained control of GGP during the third quarter of 2018 following the acquisition of the common shares not previously held by the partnership. Please see Note 4, Acquisition of GGP Inc., for further information. The partnership controls BPR as it held 95% of the voting stock of BPR through its 100% ownership of the BPR Class B and Class C shares. The balance of the voting rights in respect of BPR are held by the holders of the BPR Units.

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

The table below shows details of non-wholly owned subsidiaries of the partnership that have material non-controlling interests:

Cash received from joint venture partner $ 830.5
Less: carrying value of previous investment in Fashion Show (195.6 )
Gain from change in control of investment property 634.9

On July 21, 2016, we closed on the sale of Newgate Mall located in Ogden, Utah for a sales price of $69.5 million. The transaction netted proceeds of approximately $8.4 million and resulted in a loss of $1.4 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.

On June 30, 2016, we closed on the sale of our 49.8% interest in One Stockton Partners, LLC in San Francisco, California to our joint venture partner for $49.8 million. In connection with the sale, $16.3 million in mortgage debt was assumed. This transaction netted proceeds of approximately $33.5 million and resulted in a gain of $22.7 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2016. In addition to the sale, the joint venture partner made an $8.0 million repayment of a note receivable.

On June 28, 2016, we closed on the sale of the office building and parking garage at Pioneer Place in Portland, Oregon for $121.8 million. This transaction netted proceeds of approximately $116.0 million and resulted in a gain on sale of $35.2 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.

On February 2, 2016, we closed on the acquisition of our joint venture partner's 25% interest in Spokane Valley Mall in Spokane, Washington for $37.5 million. This transaction resulted in a reduction of additional paid-in capital of $18.4 million due to the acquisition of our partner's noncontrolling interest.

On January 29, 2016, we closed on the sale of our 75% interest in Provo Towne Center in Provo, Utah to our joint venture partner for $37.5 million. Mortgage debt of $31.1 million was repaid upon closing. This transaction netted proceeds of approximately $2.8 million and resulted in a loss of $6.7 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.

On January 29, 2016, we closed on the sale of our 10% interest in 522 Fifth Avenue in New York City to our joint venture partner for $25.0 million, inclusive of the repayment of previously existing notes receivable from our joint venture partner. We received proceeds of $10.0 million upon closing and proceeds of $5.4 million on December 15, 2016. This transaction resulted in a gain on sale of $11.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment for the year ended December 31, 2016. On May 25, 2017, we received a 10% interest in 522 Fifth Avenue in full satisfaction of the remaining $9.0 million due.

On January 15, 2016, we closed on the sale of Eastridge Mall in San Jose, California for $225.0 million. This transaction netted proceeds of approximately $216.3 million and resulted in a gain on sale of $71.7 million recognized in gain from changes in control of investment properties and other for the year ended December 31, 2016.

On January 8, 2016, we closed on the sale of our 50% interest in Owings Mills Mall in Owings Mills, Maryland to our joint venture partner for $11.6 million. This transaction netted proceeds of approximately $11.6 million and resulted in a gain on sale of $0.6 million recognized in Unconsolidated Real Estate Affiliates - gain on investment for the year ended December 31, 2016.

On November 6, 2015, we acquired an additional 2.5% direct interest in Miami Design District Associates, LLC ("MDDA") located in Miami, Florida for a gross purchase price of $40.0 million. We also own a 2.5% interest in MDDA through a joint venture and a 10% interest in MDDA through a consolidated subsidiary. The total investment of 15% is considered a cost method investment and is included in investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On September 24, 2015, we sold our interest in a joint venture that owns Lake Mead & Buffalo, which resulted in our recognition of a gain of $3.1 million. The $3.1 million is recognized within Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Operations and Comprehensive Income.

On April 27, 2015, we sold the office portion of 200 Lafayette in New York City for $124.5 million. In connection with the transaction, debt of $67.0 million was repaid. The transaction netted proceeds of approximately $49.4 million and resulted in a

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

gain on sale of $11.9 million recognized in gain from changes in control of investment properties and other on our Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2015.

On April 17, 2015, we closed on the acquisition of the Crown Building located at 730 Fifth Avenue in New York City through a joint venture partner. The Crown Building was acquired for $1.78 billion, which was funded with $1.25 billion of secured debt. We own an effective 50% interest in the retail portion of the property. GGP and Jeff Sutton own, redevelop, lease and manage the retail portion of the property which is $1.30 billion of the purchase price. We own no effective interest in the office portion of the property. Vladislav Doronin’s Capital Group and Michael Shvo own, redevelop, lease and manage the office tower which was $475.0 million of the purchase price. The office tower will be redeveloped into luxury residential condominiums. At acquisition, our share of the retail property purchase price was $650.0 million and our share of the equity was $208.5 million. In connection with the acquisition, we provided $204.3 million in loans to our joint venture partners (Note 14).

On April 1, 2015, we closed on the acquisition of property through a joint venture located at 85 Fifth Avenue in New York City for $86.0 million. The acquisition was funded with $60.0 million of secured debt. We own a 50% interest in the joint venture and our share of the equity was $14.0 million. In connection with the acquisition, we provided a $7.0 million loan to our joint venture partner (Note 14).

On March 31, 2015, we acquired a 50% interest in a joint venture with Sears Holdings Corporation that owns anchor pads and in-place leases at 12 stores located at our properties for approximately $165.0 million. Subsequently, Sears Holdings Corporation sold its investment in the joint venture to Seritage Growth Properties, which was an affiliated company. On December 14, 2015, GGP entered into agreements with two of its joint ventures to assign interest in 4 of the 12 anchor pads to the joint ventures. For the assignment and transfer of the assigned interests, GGP received net consideration of $74.0 million.

On February 27, 2015, we sold a 25% interest in Ala Moana Center in Honolulu, Hawaii for net proceeds of $907.0 million. We received $670.0 million at closing and received the remaining proceeds of $237.0 million upon completion of the redevelopment and expansion in the fourth quarter of 2016. Subsequently on April 10, 2015, we sold an additional 12.5% interest in Ala Moana Center for net proceeds of $453.5 million to another joint venture partner. We received $335.0 million at closing and received the remaining proceeds of $118.5 million upon completion of the redevelopment and expansion in the fourth quarter of 2016. As a result, our joint venture partners own a combined 37.5% economic interest in the joint venture.

Upon sale of the 25% interest in Ala Moana Center and in accordance with applicable accounting standards for real estate sales with future development required, we recognized a $584.4 million gain on change in control of investment properties and other as of the closing date calculated on the percentage of the basis (real estate asset carrying value of Ala Moana Center and development costs incurred to date) as compared to the total estimated costs expected to be incurred through completion of the development. During the year ended December 31, 2016, we recognized an additional $34.4 million gain on change of control of investment properties and other using the percentage of completion method for the construction completed from the closing date on February 27, 2015 through December 31, 2016. The construction is complete and the full gain was recognized as of December 31, 2016.

Upon sale of the 12.5% interest in Ala Moana Center and in accordance with applicable accounting standards for real estate sales with future development required, we recognized a $295.9 million gain in Unconsolidated Real Estate Affiliates - gain on investment as of the closing date calculated on the percentage of the basis (real estate asset carrying value of Ala Moana Center and development costs incurred to date) as compared to the total estimated costs expected to be incurred through completion of the development. During the year ended December 31, 2016, we recognized an additional $17.2 million gain in Unconsolidated Real Estate Affiliates - gain on investment using the percentage of completion method for the construction completed from the closing date on April 10, 2015 through December 31, 2016. The construction is complete and the full gain was recognized as of December 31, 2016.

We account for the 62.5% interest in the joint venture that owns Ala Moana Center under the equity method of accounting (Note 5) because we share control over major decisions with the joint venture partners which resulted in the partners obtaining substantive participating rights. Prior to February 2015, Ala Moana Center was wholly owned by GGP and accounted for on a consolidated basis.

On January 29, 2015, we sold our 50% interest in a joint venture that owns Trails Village in Las Vegas, Nevada for $27.6 million. In connection with the sale, mortgage debt of $5.75 million was repaid. The transaction netted proceeds of approximately $22.0

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~million and resulted in a gain of $12.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Operations and Comprehensive Income.~~

~~NOTE 4 FAIR VALUE~~

~~Nonrecurring Fair Value Measurements~~

We estimate fair value relating to impairment assessments based upon discounted cash flow and direct capitalization models that include all projected cash inflows and outflows over a specific holding period, or the negotiated sales price, if applicable. Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based upon market conditions and expectations for growth. Capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed. Based upon these inputs, we determined that our valuations of properties using a discounted cash flow or a direct capitalization model were classified within Level 3 of the fair value hierarchy. For our properties for which the estimated fair value was based on negotiated sales prices, we determined that our valuation was classified within Level 2 of the fair value hierarchy.

The following table summarizes certain of our assets that are measured at fair value on a nonrecurring basis as a result of impairment charges recorded during the year ended December 31, 2016. No impairment charges were recognized during the year ended December 31, 2017.

Total Fair Value
Measurement Quoted Prices in
Active Markets
for Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3) Provisions for Impairment
Year ended December 31, 2016

Investments in real estate (1) $ 219,165
$ —
$ 131,000
$ 88,165
$ (73,039 )


~~(1)~~	~~Refer to Note 2 for more information regarding impairment. Investments in real estate includes consolidated properties and Unconsolidated Real Estate Affiliates.~~



~~Unobservable Quantitative Input~~		~~Range~~
~~Discount rates~~		~~9.0% to 11.0%~~
~~Terminal capitalization rates~~		~~16.0% to 17.0%~~

~~Disclosure of Fair Value of Financial Instruments~~

The fair values of our financial instruments approximate their carrying amount in our consolidated financial statements except for debt. Management's estimates of fair value are presented below for our debt as of December 31, 2017 and 2016.

December 31, 2017 December 31, 2016
Carrying
Amount (1) Estimated
Fair Value Carrying
Amount (2) Estimated
Fair Value
Fixed-rate debt $ 10,420,252
$ 10,467,262
$ 10,441,166
$ 10,832,272
Variable-rate debt 2,412,207
2,415,457
1,989,252
1,990,458
$ 12,832,459
$ 12,882,719
$ 12,430,418
$ 12,822,730

~~________________________________________________________~~



	Jurisdiction of formation	Proportion of economic interests held by non- controlling interests				Non-controlling interests: Interests of others in operating subsidiaries and properties
(US$ Millions)	Jurisdiction of formation	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2018
BPO⁽¹⁾	Canada	—	%	—	%	$	4,808	$	4,757
BPR Retail Holdings LLC⁽²⁾	United States	—	%	—	%	1,787		1,773
BSREP CARS Sub-Pooling LLC⁽³⁾	United States	71	%	71	%	973		957
BSREP II PBSA Ltd.	Bermuda	75	%	75	%	791		687
BSREP II MH Holdings LLC⁽³⁾	United States	74	%	74	%	773		700
Center Parcs UK⁽³⁾	United Kingdom	73	%	73	%	675		863
BSREP II Aries Pooling LLC⁽³⁾	United States	74	%	74	%	554		603
BSREP II Retail Upper Pooling LLC⁽³⁾	United States	50	%	50	%	541		552
BSREP II Korea Office Holdings Pte. Ltd.	South Korea	78	%	78	%	484		766
BSREP India Office Holdings Pte. Ltd.	United States	67	%	67	%	403		612
BSREP UA Holdings LLC⁽³⁾	Cayman Islands	70	%	70	%	102		507
Forest City⁽³⁾⁽⁴⁾	United States	—	%	85	%	—		3,437
Other	Various	18% - 76%		18% - 92%		4,094		2,242
Total						$	15,985	$	18,456


⁽¹⁾	Includes ~~net $23.5 million of market rate adjustments and $30.3 million of deferred financing costs.~~non-controlling interests in BPO subsidiaries which vary from 1% - 100%.


⁽²⁾	Includes ~~net $27.8 million~~non-controlling interests in BPR subsidiaries.


⁽³⁾	Includes non-controlling interests representing interests held by other investors in Brookfield-sponsored real estate funds and holding entities through which the partnership participates in such funds. Also includes non-controlling interests in underlying operating entities owned by these funds.


⁽⁴⁾	The non-controlling interests of ~~market rate adjustments and $40.1 million of deferred financing costs.~~Forest City was deconsolidated on January 31, 2019. See Note 5, Investment Properties, for further information.

~~The fair value~~Summarized financial information in respect of our Junior Subordinated Notes approximates their carrying amount as of December 31, 2017 and 2016. We estimated the fair value of mortgages, notes and other loans payable using Level 2 and Level 3 inputs based on recent financing transactions, estimateseach of the ~~fair value of the property~~partnership’s subsidiaries that ~~serves as collateral for such debt, historical risk premiums for loans of comparable quality, current London Interbank Offered Rate ("LIBOR"), U.S. treasury obligation interest rates and on the~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~discounted estimated future cash payments to be made on such debt.~~have material non-controlling interests is set out below. The discount rates estimated reflect our judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and assume that the debt is outstanding through maturity. We have utilized marketsummarized financial information ~~as available or present value techniques to estimate the~~below represents amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist in specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation.

~~Recurring Fair Value of Marketable Securities~~

~~Marketable securities are measured at fair value on our Consolidated Balance Sheets using Level 1 inputs and included in prepaid expenses and other assets. The fair values are shown below.~~before intercompany eliminations.

December 31, 2015
Fair Value Cost Basis Unrealized Gain
Marketable securities:
Seritage Growth Properties $ 45,278
$ 33,300
$ 11,978



	Dec. 31, 2019
									Equity attributable to
(US$ Millions)	Current assets		Non-current assets		Current liabilities		Non-current liabilities		Non- controlling interests		Owners of the entity
BPO	$	1,705	$	43,102	$	7,133	$	17,033	$	4,979	$	15,662
BPR Retail Holdings LLC	402		32,526		1,523		15,509		1,787		14,109
BSREP CARS Sub-Pooling LLC	65		4,512		76		3,189		973		339
BSREP II PBSA Ltd.	68		2,633		73		1,566		791		271
BSREP II MH Holdings LLC	45		2,522		47		1,497		773		250
Center Parcs UK	70		4,445		242		3,343		675		255
BSREP II Aries Pooling LLC	158		1,880		487		808		554		189
BSREP II Retail Upper Pooling LLC	109		2,659		315		1,360		541		552
BSREP II Korea Office Holdings Pte. Ltd.	96		3,089		64		2,497		484		140
BSREP India Office Holdings Pte. Ltd.	35		2,252		150		1,539		403		195
BSREP UA Holdings LLC	46		349		6		243		102		44
Forest City⁽¹⁾	—		—		—		—		—		—
Total	$	2,799	$	99,969	$	10,116	$	48,584	$	12,062	$	32,006

During the year ended December 31, 2016 we divested the entire investment in Seritage Growth Properties, recognized a gain of $13.1 million in management fees and other corporate revenues, and reclassified $12.0 million out of other comprehensive income (loss).

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 5 UNCONSOLIDATED REAL ESTATE AFFILIATES~~

Following is summarized financial information for all of our real estate related Unconsolidated Real Estate Affiliates accounted for using the equity method and a reconciliation to our total investment in Unconsolidated Real Estate Affiliates, inclusive of investments accounted for using the cost method (Note 2).

December 31, 2017 December 31, 2016
Condensed Combined Balance Sheets—Unconsolidated Real Estate Affiliates (1)

Assets:

Land $ 2,908,181
$ 2,664,736
Buildings and equipment 14,014,665
13,555,059
Less accumulated depreciation (3,794,792 ) (3,538,776 )
Construction in progress 545,305
284,198
Net property and equipment 13,673,359
12,965,217
Investments in unconsolidated joint ventures 613,136
503,305
Net investment in real estate 14,286,495
13,468,522
Cash and cash equivalents 438,664
455,862
Accounts receivable, net 386,634
655,655
Notes receivable 15,058
8,912
Deferred expenses, net 339,327
321,095
Prepaid expenses and other assets 381,980
327,645
Total assets $ 15,848,158
$ 15,237,691
Liabilities and Owners’ Equity:
��
Mortgages, notes and loans payable $ 10,504,799
$ 10,476,935
Accounts payable, accrued expenses and other liabilities 1,115,549
595,570
Cumulative effect of foreign currency translation (“CFCT”) (38,013 ) (50,851 )
Owners’ equity, excluding CFCT 4,265,823
4,216,037
Total liabilities and owners’ equity $ 15,848,158
$ 15,237,691
Investment In Unconsolidated Real Estate Affiliates, Net:

Owners’ equity $ 4,227,810
$ 4,165,186
Less: joint venture partners’ equity (2,413,822 ) (2,095,166 )
Plus: excess investment/basis differences 1,547,462
1,590,821
Investment in Unconsolidated Real Estate Affiliates, net (equity method) $ 3,361,450
$ 3,660,841
Investment in Unconsolidated Real Estate Affiliates, net (cost method) 30,483
180,000
Elimination of consolidated real estate investment interest through joint venture (52,305 ) (27,500 )
Retail investment, net 16,091
16,146
Investment in Unconsolidated Real Estate Affiliates, net 3,355,719
3,829,487

Reconciliation—Investment In Unconsolidated Real Estate Affiliates:

Asset—Investment in Unconsolidated Real Estate Affiliates $ 3,377,112
$ 3,868,993
Liability—Investment in Unconsolidated Real Estate Affiliates (21,393 ) (39,506 )
Investment in Unconsolidated Real Estate Affiliates, net $ 3,355,719
$ 3,829,487

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~


⁽¹⁾	The non-controlling interests of Forest City was deconsolidated on January 31, 2019. See Note 5, Investment Properties, for further information.

~~(1) The Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates include Miami Design District as of December 31, 2017. Refer to the discussion below regarding Miami Design District.~~

Year ended December 31, 2017 Year ended December 31, 2016 Year ended December 31, 2015
Condensed Combined Statements of Income—Unconsolidated Real Estate Affiliates (1)

Revenues:

Minimum rents $ 1,186,646
$ 1,106,691
$ 1,011,393
Tenant recoveries 489,307
473,357
443,905
Overage rents 36,377
39,298
38,282
Condominium sales 328,237
520,360
—
Other 70,497
52,511
52,027
Total revenues 2,111,064
2,192,217
1,545,607
Expenses:

Real estate taxes 140,944
124,355
129,593
Property maintenance costs 41,550
41,132
41,619
Marketing 21,338
22,368
19,348
Other property operating costs 230,930
214,071
214,417
Condominium cost of sales 239,528
379,401
—
Provision for doubtful accounts 6,416
13,665
5,427
Property management and other costs(2)
84,446
71,499
64,084
General and administrative 2,101
3,198
10,245
Depreciation and amortization 505,387
466,715
408,537
Total expenses 1,272,640
1,336,404
893,270
Operating income 838,424
855,813
652,337
Interest income 11,054
9,505
7,070
Interest expense (465,242 ) (318,628 ) (395,114 )
Provision for income taxes (1,312 ) (1,278 ) (996 )
Equity in loss of unconsolidated joint ventures (23,553 ) (45,057 ) (28,513 )
Income from continuing operations 359,371
500,355
234,784
Allocation to noncontrolling interests (103 ) (128 ) (64 )
Net income attributable to the ventures $ 359,268
$ 500,227
$ 234,720
Equity In Income of Unconsolidated Real Estate Affiliates:

Net income attributable to the ventures $ 359,268
$ 500,227
$ 234,720
Joint venture partners’ share of income (162,469 ) (235,544 ) (112,582 )
Elimination of loss from consolidated real estate investment with interest owned through joint venture 860
1,266
—
Gain (loss) on retail investment (3,874 ) 4,264
—
Amortization of capital or basis differences (3) (41,035 ) (38,598 ) (48,748 )
Equity in income of Unconsolidated Real Estate Affiliates $ 152,750
$ 231,615
$ 73,390

(1) The Condensed Combined Statements of Income - Unconsolidated Real Estate Affiliates include income from Ala Moana Center subsequent to the formation of the joint venture on February 27, 2015, income from Fashion Show subsequent to the formation of the joint venture on July 29, 2016 and income from Miami Design District subsequent to June 1, 2017.

~~GGP INC.~~



	Dec. 31, 2018
									Equity attributable to
(US$ Millions)	Current assets		Non-current assets		Current liabilities		Non-current liabilities		Non- controlling interests		Owners of the entity
BPO	$	1,391	$	38,895	$	5,216	$	16,521	$	4,928	$	13,621
Forest City	1,029		11,246		602		7,741		3,437		495
BPR Retail Holdings LLC	478		29,197		507		13,241		1,773		14,154
BSREP CARS Sub-Pooling LLC	38		5,074		42		3,776		957		337
Center Parcs UK	191		4,110		242		2,869		863		327
BSREP II Korea Office Holdings Pte. Ltd.	87		2,986		56		2,030		766		221
BSREP II MH Holdings LLC	42		2,438		39		1,515		700		226
BSREP II PBSA Ltd.	72		2,196		428		918		687		235
BSREP India Office Holdings Pte. Ltd.	44		2,044		183		996		612		297
BSREP II Aries Pooling LLC	95		2,246		330		1,202		603		206
BSREP II Retail Upper Pooling LLC	88		2,956		970		976		552		546
BSREP UA Holdings LLC	51		1,583		28		880		507		219
Total	$	3,606	$	104,971	$	8,643	$	52,665	$	16,385	$	30,884

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~(2) Includes management fees charged to the unconsolidated joint ventures by GGMI and GGSI.~~

~~(3) Includes a $3.2 million impairment charge related to our investment in a single property venture during the year ended December 31, 2015 (Note 2).~~

The Unconsolidated Real Estate Affiliates represent our investments in real estate joint ventures that are not consolidated. We hold interests in 22 domestic joint ventures, comprising 38 U.S. retail properties and one joint venture in Brazil. Generally, we share in the profits and losses, cash flows and other matters relating to our investments in Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. We manage most of the properties owned by these joint ventures. We account for investments in joint ventures where we own a non-controlling joint interest using either the equity method or the cost method. If we have significant influence but not control over the investment, we utilize the equity method. If we have neither control nor significant influence, we utilize the cost method. If we control the joint venture, we account for the venture as a consolidated investment.

On March 7, 2014, we formed a joint venture, AMX Partners, LLC ("AMX"), with Kahikolu Partners, LLC (“MKB”) for the purpose of constructing a luxury residential condominium tower on a site located within the Ala Moana Shopping Center. In conjunction with the closing of AMX, GGP agreed to sell the air rights above the parking podium to AMX for $50.0 million. GGP received a $50.0 million payment during the year ended December 31, 2015. AMX commenced recognizing revenues and cost of sales from the sale of condominiums using the percentage of completion method during the twelve months ended December 31, 2016.

In accordance with GAAP, sales of condominiums have been recognized using the percentage of completion method. Under this method, revenue is recognized when (1) construction is beyond a preliminary stage, (2) buyers are unable to receive refunds of down-payments except in the event of non-delivery, (3) a substantial percentage of the condominiums are under firm contracts, (4) collection of the sales price is reasonably assured and (5) sales proceeds and costs can be reasonably estimated. The revenue from condominium sales is calculated based on the percentage of completion, as determined by the construction contract costs incurred to date in relation to the total estimated construction costs. As part of the new revenue recognition guidance (Note 2), revenues from the sales of condominiums will be recognized using the completed contract method as of January 1, 2018.

On March 24, 2016, Kenwood Towne Centre in Cincinnati, Ohio (property included in a joint venture of which we are 50% owner) acquired fee title to a portion of the property previously held under ground lease for a gross purchase price of $43.0 million.

~~On September 15, 2016, joint ventures we formed with Simon Property Group and Authentic Brands Group LLC acquired Aeropostale (Note 3), which is presented as a retail investment above.~~

On November 1, 2016, we acquired the other 50% interest in Riverchase Galleria through affiliates in a joint venture for a sales price of $143.5 million including the assumption of our venture partner's $110.3 million share of property level debt for the 50% interest. We now account for Riverchase Galleria as a consolidated property.

On June 1, 2017, we received an additional 7.3% of our joint venture partner's membership interests in Miami Design District in full satisfaction of two promissory notes for $57.6 million and $40.4 million, respectively, resulting in a total ownership of 22.3% (Note 14). We determined that we had significant influence over the investment subsequent to the acquisition of the additional interest, and therefore we changed our method of accounting for this joint venture from the cost method to the equity method (Note 2).

On September 19, 2017, we entered into three transactions with affiliates of Thor related to joint ventures between GGP and Thor at 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue. Subsequent to the transactions, we changed our method of accounting for these three joint ventures from the equity method of accounting. We now consolidate the joint ventures with our joint venture partner's share of equity included in noncontrolling interest (Note 3).

To the extent that the Company contributes assets to a joint venture accounted for using the equity method, the Company’s investment in the joint venture is recorded at the Company’s cost basis in the assets that were contributed to the joint venture. The Company will recognize gains and losses on the contribution of its real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the buyer is independent of the Company, the collection of the sales price is reasonably assured, and the Company

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~will not be required to support the operations of the property or its related obligations to an extent greater than its proportionate interest.~~

~~Unconsolidated Mortgages, Notes and Loans Payable and Retained Debt~~

Our proportionate share of the mortgages, notes and loans payable of the unconsolidated joint ventures was $5.1 billion as of December 31, 2017 and $5.4 billion as of December 31, 2016, including Retained Debt (as defined below). There can be no assurance that the Unconsolidated Properties will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.

We have debt obligations in excess of our pro rata share of the debt for one of our Unconsolidated Real Estate Affiliates ("Retained Debt"). This Retained Debt represents distributed debt proceeds of the Unconsolidated Real Estate Affiliates in excess of our pro rata share of the non-recourse mortgage indebtedness. The proceeds of the Retained Debt which were distributed to us are included as a reduction in our investment in Unconsolidated Real Estate Affiliates. We had retained debt of $85.2 million at one property as of December 31, 2017, and $86.5 million as of December 31, 2016. We are obligated to contribute funds on an ongoing basis, as needed, to our Unconsolidated Real Estate Affiliates in amounts sufficient to pay debt service on such Retained Debt. If we do not contribute such funds, our distributions from such Unconsolidated Real Estate Affiliates, or our interest in, could be reduced to the extent of such deficiencies. As of December 31, 2017, we do not anticipate an inability to perform on our obligations with respect to Retained Debt.

~~NOTE 6 MORTGAGES, NOTES AND LOANS PAYABLE~~

~~Mortgages, notes and loans payable and the weighted-average interest rates are summarized as follows:~~

December 31, 2017(1) Weighted-Average
Interest Rate(2)
December 31, 2016
(3)
Weighted-Average
Interest Rate(2)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable (4) $ 10,420,252 4.41% $ 10,441,166 4.44%
Total fixed-rate debt 10,420,252 4.41% 10,441,166 4.44%
Variable-rate debt:
Collateralized mortgages, notes and loans payable (4) 2,418,628 3.39% 1,997,978 2.45%
Revolving credit facility (6,421 ) — (8,726 ) —%
Total variable-rate debt 2,412,207 3.39% 1,989,252 2.45%
Total Mortgages, notes and loans payable $ 12,832,459 4.22% $ 12,430,418 4.12%
Junior Subordinated Notes $ 206,200 2.83% $ 206,200 2.34%



	Year ended Dec. 31, 2019
			Attributable to non-controlling interests								Attributable to owners of the partnership
(US$ Millions)	Revenue		Net income (loss)			Total compre-hensive income			Distributions		Net income (loss)			Total compre-hensive income
BPO	$	2,149	$	318		$	306		$	77	$	757		$	808
BPR Retail Holdings LLC	1,592		66			67			122		652			657
BSREP CARS Sub-Pooling LLC	317		67			62			48		23			21
BSREP II PBSA Ltd.	148		144			173			85		49			59
BSREP II MH Holdings LLC	239		62			62			—		20			20
Center Parcs UK	658		47			139			320		17			51
BSREP II Aries Pooling LLC	256		75			74			33		26			26
BSREP II Retail Upper Pooling LLC	298		(121		)	(121		)	2		(116		)	(116		)
BSREP II Korea Office Holdings Pte. Ltd.	219		52			26			131		15			7
BSREP India Office Holdings Pte. Ltd.	187		144			129			181		70			62
BSREP UA Holdings LLC	115		(96		)	(96		)	222		(43		)	(43		)
Forest City⁽¹⁾	—		—			—			—		—			—
Total	$	6,178	$	758		$	821		$	1,221	$	1,470		$	1,552


⁽¹⁾	~~Includes net $23.5 million~~The non-controlling interests of ~~market rate adjustments and $30.3 million~~Forest City was deconsolidated on January 31, 2019. See Note 5, Investment Properties, for further information.



	Year ended Dec. 31, 2018
			Attributable to non-controlling interests									Attributable to owners of the partnership
(US$ Millions)	Revenue		Net income (loss)			Total compre-hensive income			Distributions			Net income (loss)			Total compre-hensive income
BPO	$	2,159	$	245		$	240		$	35		$	147		$	194
Forest City	65		(153		)	(153		)	21			(27		)	(27		)
BPR Retail Holdings LLC	584		34			34			(1		)	457			447
BSREP CARS Sub-Pooling LLC	311		105			99			54			37			34
Center Parcs UK	644		87			50			55			33			19
BSREP II Korea Office Holdings Pte. Ltd.	211		96			69			8			28			20
BSREP II MH Holdings LLC	248		132			132			8			42			42
BSREP II PBSA Ltd.	131		68			20			—			23			7
BSREP India Office Holdings Pte. Ltd.	176		245			209			11			119			102
BSREP II Aries Pooling LLC	190		51			52			69			18			18
BSREP II Retail Upper Pooling LLC	302		(190		)	(191		)	1			(189		)	(190		)
BSREP UA Holdings LLC	128		20			20			—			9			9
Total	$	5,149	$	740		$	581		$	261		$	697		$	675



	Year ended Dec. 31, 2017
			Attributable to non-controlling interests								Attributable to owners of the partnership
(US$ Millions)	Revenue		Net income (loss)			Total compre-hensive income			Distributions		Net income (loss)			Total compre-hensive income
BPO	$	2,224	$	120		$	139		$	9	$	(718	)	$	(672	)
BSREP CARS Sub-Pooling LLC	311		87			85			377		30			29
Center Parcs UK	587		13			94			210		5			36
BSREP Industrial Pooling Subsidiary L.P.⁽¹⁾	143		175			175			163		65			65
BSREP II Korea Office Holdings Pte. Ltd.	194		144			230			119		41			66
BSREP II Aries Pooling LLC	285		53			54			59		18			18
BSREP II Retail Upper Pooling LLC	306		50			50			1		42			42
BSREP II MH Holdings LLC	194		133			133			16		44			44
Brookfield Strategic Real Estate Partners II Storage REIT LLC⁽²⁾	168		82			82			8		27			27
BSREP II PBSA Ltd.	74		109			131			—		37			44
BSREP UA Holdings LLC	124		117			117			99		50			50
BREF ONE, LLC⁽²⁾	717		(33		)	(8		)	—		(17		)	(5		)
BSREP II Brazil Pooling LLC⁽²⁾	70		63			55			17		30			26
BSREP India Office Holdings Pte. Ltd.	156		130			154			47		63			75
BSREP Europe Holdings L.P.⁽²⁾	96		782			896			1,289		359			419
Total	$	5,649	$	2,025		$	2,387		$	2,414	$	76		$	264


⁽¹⁾	In the fourth quarter of ~~deferred financing costs.~~2018, the partnership sold its U.S. logistics portfolio held through a Brookfield-sponsored real estate fund.


⁽²⁾	~~Represents~~In the ~~weighted-average~~current year ended December 31, 2019, these entities are presented within Other non-controlling interest ~~rates on our principal balances, excluding~~as the ~~effects of deferred finance costs.~~


~~(3)~~	~~Includes net $27.8 million of market rate adjustments and $40.1 million of deferred financing costs.~~


~~(4)~~	~~$1.4 billion of the variable-rate balance is cross-collateralized.~~


~~(5)~~	~~Includes deferred financing costs, which~~non-controlling interests are ~~shown as a reduction to the debt balance. See table below for the balance excluding deferred financing costs.~~not material.

~~Collateralized Mortgages, Notes and Loans Payable~~

As of December 31, 2017, $18.1 billion of land, buildings and equipment (before accumulated depreciation) and construction in progress have been pledged as collateral for our consolidated mortgages, notes and loans payable. Certain of ~~these consolidated secured loans, representing $1.4 billion of debt,~~the partnership’s subsidiaries are ~~cross-collateralized with other properties. Although a majority of~~subject to restrictions over the ~~$12.8 billion of consolidated fixed and variable rate collateralized mortgages, notes and loans payable are non-recourse, $811.7 million of such mortgages, notes and loans payable are recourse~~extent to which they can remit funds to the ~~Company as guarantees on secured financings. In addition, certain~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars~~partnership in ~~thousands, except per share amounts)~~

~~mortgage~~the form of cash dividends, or repayment of loans ~~contain other credit enhancement provisions which have been provided by GGP. Certain mortgages, notes~~ and ~~loans payable may be prepaid but are generally subject to a prepayment penalty equal to a yield-maintenance premium, defeasance or a percentage of the loan balance.~~

During the year ended December 31, 2017, we paid down a $73.4 million consolidated mortgage note at one property. The prior loan had a term-to-maturity of 0.2 years and an interest rate of 5.6%. The property subsequently replaced a property that was sold during the year ended December 31, 2017 as collateral in our $1.4 billion loan secured by cross-collateralized mortgages on 14 properties. In addition, we obtained a new consolidated mortgage note at one property for $325.0 million with an interest rate of 3.98%. Finally,advances as a result of ~~the three transactions with Thor (Note 3), we now consolidate a total of $450.0 million consolidated mortgage notes with an interest rates of LIBOR plus 2.75%~~borrowing arrangements, regulatory restrictions and LIBOR plus 3.25%. Finally, we refinanced a $190.0 million consolidated mortgage note with a $110.0 million consolidated mortgage note. Both notes had an interest rate of LIBOR plus 3.25%. Additional financing activity related to draws and repayments on the corporate revolver.other contractual requirements.

During the year ended December 31, 2016, we paid down $294.4 million of consolidated mortgage notes at two properties. The prior loans had a weighted-average term-to-maturity of 1.2 years and a weighted-average interest rate of 5.3%. In conjunction with the pay down of the loans, we paid $5.4 million in transaction costs that are included in interest expense.

On April 25, 2016, we amended our $1.4 billion loan secured by cross-collateralized mortgages on 15 properties. The interest rate remained consistent at LIBOR plus 1.75%, however, we were able to decrease the recourse from 100% to 50% and extend the term for three years. The loan now matures April 25, 2019, with two one year extension options.

~~Corporate and Other Unsecured Loans~~

Our revolving credit facility (the "Facility") as amended on October 30, 2015, provides for revolving loans of up to $1.1 billion. The Facility has an uncommitted accordion feature for a total facility of up to $1.5 billion. The Facility is scheduled to mature in October 2020 and is unsecured. Borrowings under the Facility bear interest at a rate equal to LIBOR plus 130 to 190 basis points or at a base rate plus 30 to 90 basis points, which is determined by the Company’s leverage level. The Facility contains certain restrictive covenants which limit material changes in the nature of our business conducted, including, but not limited to, mergers, dissolutions or liquidations, dispositions of assets, liens, incurrence of additional indebtedness, dividends, transactions with affiliates, prepayment of subordinated debt, negative pledges and changes in fiscal periods. In addition, we are required not to exceed a maximum net debt-to-value ratio, a maximum leverage ratio and a minimum net cash interest coverage ratio; we are not aware of any instances of non-compliance with such covenants as of December 31, 2017. No amount was outstanding on the Facility as of December 31, 2017 and 2016.

~~Junior Subordinated Notes~~

GGP Capital Trust I, a Delaware statutory trust (the "Trust") and a wholly-owned subsidiary of GGPN, completed a private placement of $200.0 million of trust preferred securities ("TRUPS") in 2006. The Trust also issued $6.2 million of Common Securities to GGPOP. The Trust used the proceeds from the sale of the TRUPS and Common Securities to purchase $206.2 million of floating rate Junior Subordinated Notes of GGPOP due 2036. Distributions on the TRUPS are equal to LIBOR plus 1.45%. Distributions are cumulative and accrue from the date of original issuance. The TRUPS mature on April 30, 2036, but may be redeemed beginning on April 30, 2011 if the Trust exercises its right to redeem a like amount of Junior Subordinated Notes. The Junior Subordinated Notes bear interest at LIBOR plus 1.45% and are fully recourse to the Company. We have recorded the Junior Subordinated Notes as a liability and our common equity interest in the Trust as prepaid expenses and other assets in our Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016.

~~Letters of Credit and Surety Bonds~~

We had outstanding letters of credit and surety bonds of $51.3 million as of December 31, 2017 and $57.8 million as of December 31, 2016. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.

~~We are not aware of any instances of non-compliance with our financial covenants related to our mortgages, notes and loans payable as of December 31, 2017.~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

NOTE ~~7 INCOME TAXES~~

We have elected to be taxed as a REIT under the Internal Revenue Code. We intend to maintain REIT status. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our taxable ordinary income. In addition, the Company is required to meet certain asset and income tests.

As a REIT, we will generally not be subject to corporate level Federal income tax on taxable income we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income or property, and to Federal income and excise taxes on our undistributed taxable income and capital gains. We are currently statutorily open to audit by the Internal Revenue Service for the years ended December 31, 2014 through 2017 and are statutorily open to audit by state taxing authorities for the years ended December 31, 2013 through 2017. We have one TRS that has extended the statute of limitations for the year ended December 31, 2013 until September 30, 2018 for purposes of reviewing a carryback claim.

7. EQUITY ACCOUNTED INVESTMENTS

The ~~provision for (benefit from) income taxes for the years ended December 31, 2017, 2016, and 2015 are as follows:~~

December 31, 2017 December 31, 2016 December 31, 2015
Current $ 8,658
$ 804
$ 3,134
Deferred (19,554 ) 97
(41,468 )
Total (10,896 ) 901
(38,334 )

~~Realization of a deferred tax benefit is dependent upon generating sufficient taxable income~~partnership has investments in ~~future periods. The company has $81.6 million of state loss carryforwards~~joint arrangements that are ~~currently scheduled to expire~~joint ventures, and also has investments in ~~subsequent years through 2037.~~

~~Each TRS~~associates. Joint ventures hold individual commercial properties and ~~certain REIT entities subject to state income taxes are tax paying components for purposes~~portfolios of ~~classifying deferred tax assets~~commercial properties and ~~liabilities. Net deferred tax assets (liabilities) are summarized as follows:~~

December 31, 2017 December 31, 2016 December 31, 2015
Total deferred tax assets $ 29,801
$ 22,090
$ 34,870
Valuation allowance (8,740 ) (15,147 ) (15,127 )
Net deferred tax assets 21,061
6,943
19,743
Total deferred tax liabilities (2,428 ) (3,843 ) (1,289 )
Net deferred tax assets (liabilities) $ 18,633
$ 3,100
$ 18,454

~~Due~~developments that the partnership owns together with co-owners where decisions relating to the ~~uncertainty~~relevant activities of the realization of certain tax carryforwards, we have established valuation allowances on those deferred tax assets that we do not reasonably expect to realize. Deferred tax assets that we believe have only a remote possibility of realization have not been recorded.

~~The tax effects of temporary differences and carryforwards included in~~joint venture require the ~~net deferred tax assets (liabilities) as of December 31, 2017, December 31, 2016 and December 31, 2015 are summarized as follows:~~

December 31, 2017(1) December 31, 2016 December 31, 2015
Operating loss and tax credit carryforwards (2) $ 47,577
$ 42,496
$ 18,541
Other TRS property, primarily differences in basis of assets and liabilities (20,204 ) (24,249 ) 15,040
Valuation allowance (8,740 ) (15,147 ) (15,127 )
Net deferred tax assets (liabilities) $ 18,633
$ 3,100
$ 18,454

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~


~~(1)~~	~~Due to the changes in the Tax Cuts and Jobs Act, the deferred tax assets and liabilities including the valuation allowances were revalued as of December 31, 2017 using the new corporate tax rate.~~


~~(2)~~	~~Includes solar and other tax credits of $33.6 million, $20.6 million and $4.1 million as of December 31, 2017, December 31, 2016 and December 31, 2015, respectively.~~

We have no unrecognized tax benefits recorded pursuant to uncertain tax positions as of December 31, 2017 and December 31, 2016. Uncertain tax positions of $6.1 million as of December 31, 2014, excluding interest, were recognized in 2015 upon the expirationunanimous consent of the ~~statute of limitations.~~

~~NOTE 8 WARRANTS~~

As of December 31, 2016, Brookfield and certain parties who were previously members of a Brookfield investor consortium owned 73,930,000 warrants (the “Warrants”) to purchase common stock of GGP with an initial weighted average exercise price of $10.70. Each Warrant was fully vested upon issuance, had a term of seven years and expired on November 9, 2017. Below is a summary of Warrants that were originally issued.

Warrant Holder Number of Warrants Initial
Exercise Price
Brookfield - A 57,500,000
$ 10.75
Brookfield - B 16,430,000
10.50
73,930,000

~~The exercise prices~~co-owners. Details of the ~~Warrants were subject to adjustment~~partnership’s investments in joint ventures and associates, which have been accounted for future dividends, stock dividends, distribution of assets, stock splits or reverse splits of our common stock or certain other events. In accordance with the agreement, these calculations adjusted both the exercise price and the number of shares issuable for the originally issued 73,930,000 Warrants. During 2016 and 2017, the number of shares issuable upon exercise of the outstanding Warrants changed as follows:

Exercise Price
Record Date Issuable Shares Brookfield - A Brookfield - B
April 15, 2016 90,288,964
$ 8.80
$ 8.60
July 15, 2016 90,865,607
8.75
8.54
October 14, 2016 91,553,142
8.68
8.48
December 15, 2016 92,344,178
8.61
8.41
December 27, 2016 93,268,285
8.52
8.32
April 13, 2017 94,170,214
8.44
8.24
July 13, 2017 95,057,357
8.36
8.17
October 13, 2017 17,942,385
8.27
8.08

The warrant holders had the option for 57,500,000 Warrants to either full share settle (i.e. deliver cash for the exercise price of the Warrants) or net share settle at the option of the holder. The remaining 16,430,000 Warrants had to be net share settled. As of December 31, 2017, no Warrants remained outstanding.

During 2017, 83,866,187 shares of the Company's common stock were issued to Brookfield, Abu Dhabi Investment Authority and Future Fund Board of Guardians for exercised Warrants. As of December 31, 2017, no Warrants remained outstanding. Refer to the following paragraphs for details pertaining to each transaction.

On October 6, 2017, Brookfield exercised Warrants to purchase shares of our common stock, par value $0.01 per share, using a combination of the net share settlement method and the full physical settlement method. On October 6, 2017, the Warrants exercised by Brookfield were settled in accordance with the ~~terms~~equity method of the Warrant agreement. 55,296,573 shares of common stock were issued to Brookfield for an aggregate of $462.4 million in cash and 13,523,695 shares of common stock were issued to Brookfield under net share settlement at a price of $21.21 per share.

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

On October 25, 2017, Abu Dhabi Investment Authority ("ADIA") exercised 5,549,327 warrants to purchase common stock, par value $0.01 per share, using the net share settlement method. On October 30, 2017, the Warrants exercised by ADIA were settled in accordance with the terms of the Warrant Agreement and 4,314,330 shares of common stock were issued to ADIA. The Company withheld 2,896,465 shares of common stock, valued at the closing price for the common stock on October 25, 2017 of $20.60, to satisfy the aggregate exercise price.

On November 2, 2017, The Northern Trust Company as custodian for the Future Fund Board of Guardians exercised 8,258,881 Warrants to purchase common stock, par value $0.01 per share, using the full share settlement method. On November 7, 2017, the Warrants exercised by Future Fund were settled in accordance with the terms of the Warrant Agreement and 10,731,589 shares of common stock were issued to Future Fund for an aggregate of $88.8 million in cash.

~~NOTE 9 RENTALS UNDER OPERATING LEASES~~

~~We receive rental income from the leasing of retail and other space under operating leases. The minimum future rentals based on operating leases of our Consolidated Properties as of December 31, 2017~~accounting, are as follows:

Year Amount
2018 $ 1,290,268
2019 1,168,471
2020 1,053,017
2021 936,655
2022 810,624
Subsequent 2,651,658
$ 7,910,693



			Proportion of ownership interests/voting rights held by the partnership				Carrying value
(US$ Millions)	Principal activity	Principal place of business	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2018
Joint ventures
Canary Wharf Joint Venture⁽¹⁾	Property holding company	United Kingdom	50	%	50	%	$	3,578	$	3,270
Ala Moana Center, Hawaii	Property holding company	United States	50	%	50	%	1,946		1,611
Manhattan West, New York	Property holding company	United States	56	%	56	%	1,918		1,619
BPR JV Pool A	Property holding company	United States	50	%	50	%	1,882		1,791
BPR JV Pool B	Property holding company	United States	51	%	51	%	1,366		1,217
Fashion Show, Las Vegas	Property holding company	United States	50	%	50	%	832		881
BPR JV Pool C	Property holding company	United States	50	%	50	%	777		756
Grace Building, New York	Property holding company	United States	50	%	50	%	716		581
BPR JV Pool D	Property holding company	United States	48	%	48	%	649		693
Southern Cross East, Melbourne	Property holding company	Australia	50	%	50	%	466		402
The Grand Canal Shoppes, Las Vegas	Property holding company	United States	50	%	50	%	414		608
One Liberty Plaza, New York	Property holding company	United States	51	%	51	%	409		425
680 George Street, Sydney	Property holding company	Australia	50	%	50	%	340		319
Brookfield Brazil Retail Fundo de Investimento em Participaçõe (“Brazil Retail”)	Holding company	Brazil	46	%	46	%	335		309
Baybrook Mall, Texas	Property holding company	United States	51	%	51	%	332		235
Brookfield D.C. Office Partners LLC ("D.C. Fund"), Washington, D.C.	Property holding company	United States	51	%	51	%	283		295
The Mall in Columbia, Maryland	Property holding company	United States	50	%	50	%	282		268
BPR JV Pool F	Property holding company	United States	51	%	51	%	278		185
BPR JV Pool G	Property holding company	United States	68	%	68	%	254		225
Miami Design District, Florida	Property holding company	United States	22	%	22	%	252		286
BPR JV Pool E⁽²⁾	Property holding company	United States	—	%	35	%	—		629
Forest City Joint Ventures⁽³⁾	Property holding company	United States	—	%	—	%	—		1,390
Shops at Merrick Park, Florida⁽²⁾	Property holding company	United States	—	%	55	%	—		266
Other⁽⁴⁾	Various	Various	14% - 55%		12% - 70%		3,119		3,592
							20,428		21,853
Associates
Diplomat Resort and Spa (“Diplomat”)⁽⁵⁾	Property holding company	United States	—	%	90	%	—		390
Brookfield Premier Real Estate Partners Pooling LLC (“BPREP”)⁽⁶⁾	Property holding company	United States	—	%	7	%	—		106
Other	Various	Various	23% - 31%		23% - 31%		336		349
							336		845
Total							$	20,764	$	22,698


⁽¹⁾	Stork Holdco LP is the joint venture through which the partnership acquired Canary Wharf Group plc in London.


⁽²⁾	The partnership acquired its joint venture partner’s incremental interest in the BPR JV Pool E and Shops at Merrick Park during 2019. The partnership will now consolidate the results of these investments. See below for further information.


⁽³⁾	Includes the impact of the deconsolidation of BSREP III investments, primarily Forest City. See below for further information.


⁽⁴⁾	Other joint ventures consists of approximately 40 joint ventures, all of which have a carrying value below $250 million.


⁽⁵⁾	In the fourth quarter of 2019, the partnership reclassified its interest in the Diplomat to assets held for sale.


⁽⁶⁾	In the first quarter of 2019, the partnership accounted for its interest in BPREP as a financial asset and is no longer an equity accounted investment.

Minimum future rentals exclude amounts which are payable by certain tenants based upon a percentage of their gross sales or as reimbursement of operating expenses and amortization of above and below-market tenant leases. Such operating leases are with a variety of tenants, the majority of which are national and regional retail chains and local retailers, and consequently, our credit risk is concentrated in the retail industry.

(a) 2019 Transactions

~~NOTE 10 EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS~~

~~Allocation~~The deconsolidation of BSREP III resulted in a decrease to ~~Noncontrolling Interests~~equity accounted investments of $1,434 million. Please see Note 5, Investment Properties for further information.

~~Noncontrolling interests consists~~In the fourth quarter of 2019, the partnership acquired its joint venture partners’ incremental interest in Park Meadows in Colorado, Towson Town Center in Maryland, Perimeter Mall in Georgia, and Shops at Merrick Park in Florida, to bring its ownership to 100% and concurrently sold its interest in Bridgewater Commons in New Jersey to the joint venture partner. Prior to the acquisition, the partnership’s joint venture interest was reflected as equity accounted investments. As a result, the partnership gained control of the ~~redeemable~~investments and consolidate its results.

(b) 2018 Transactions

The partnership obtained control of GGP during the third quarter of 2018 following the acquisition of the common shares not previously held by the partnership and its subsidiaries. Subsequent to this transaction, the partnership is consolidating the financial results of GGP, including its interests ~~related to GGPOP Common, Preferred, and LTIP Units and the noncontrolling interest~~ in ~~our consolidated~~properties held through joint ventures. The partnership’s 34% interest in GGP prior to the acquisition was derecognized. Please see Note 4, Acquisition of GGP Inc., for further information.

The partnership obtained control of Forest City during the fourth quarter of 2018 following the acquisition in the BSREP III fund. Forest City included properties held through joint ventures. As mentioned above, these investments were deconsolidated in 2019.

The following table ~~reflects~~presents the ~~activity included~~change in the ~~allocation to noncontrolling interests.~~balance of the partnership’s equity accounted investments as of December 31, 2019 and 2018:

Year Ended December 31,
2017 2016 2015
Distributions to preferred Operating Partnership units $ (1,867 ) $ (8,680 ) $ (8,884 )
Net income allocation to noncontrolling interests in operating partnership from continuing operations (common units) (4,830 ) (7,051 ) (7,466 )
Net income allocation to noncontrolling interests in operating partnership from continuing operations (LTIP units) (1,502 ) (2,920 ) (2,524 )
Net income allocated to noncontrolling interest in consolidated real estate affiliates (1,340 ) (1,255 ) (161 )
Allocation to noncontrolling interests (9,539 ) (19,906 ) (19,035 )
Other comprehensive loss (income) allocated to noncontrolling interests 89
2
233
Comprehensive income allocated to noncontrolling interests $ (9,450 ) $ (19,904 ) $ (18,802 )



(US$ Millions) Years ended Dec. 31,	2019			2018
Equity accounted investments, beginning of year	$	22,698		$	19,761
GGP joint ventures acquired from business acquisition⁽¹⁾	—			10,829
Deconsolidation of pre-acquisition GGP equity interest⁽¹⁾	—			(8,345		)
Additions	684			2,174
Disposals and return of capital distributions	(764		)	(1,304		)
Share of net earnings from equity accounted investments	1,969			947
Distributions received	(470		)	(518		)
Foreign currency translation	127			(395		)
Reclassification to assets held for sale⁽²⁾	(189		)	(567		)
Impact of deconsolidation of BSREP III⁽³⁾	(1,434		)	—
Other comprehensive income and other⁽⁴⁾	(1,857		)	116
Equity accounted investments, end of year	$	20,764		$	22,698

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~Noncontrolling Interests~~

The noncontrolling interest related to the Common, Preferred, and LTIP Units of GGPOP are presented either as redeemable noncontrolling interests in mezzanine equity or as noncontrolling interests in our permanent equity on our Consolidated Balance Sheets. Classification as redeemable or permanent equity is considered on a tranche-by-tranche basis and is dependent on whether we could be required, under certain events outside of our control, to redeem the securities for cash by the holders of the securities. Those tranches for which we could be required to redeem the security for cash are included in redeemable equity. If we control the decision to redeem the securities for cash, the securities are classified as permanent equity.

The redeemable Common and Preferred Units of GGPOP are recorded at the greater of the carrying amount adjusted for the noncontrolling interest's share of the allocation of income or loss (and its share of other comprehensive income or loss) and dividends or their redemption value (i.e. fair value) as of each measurement date. The excess of the fair value over the carrying amount from period to period is recorded within additional paid-in capital in our Consolidated Balance Sheets. Allocation to noncontrolling interests is presented as an adjustment to net income to arrive at net income (loss) attributable to GGP Inc

The common redeemable noncontrolling interests have been recorded at fair value for all periods presented. One tranche of preferred redeemable noncontrolling interests has been recorded at fair value, while the other tranches of preferred redeemable noncontrolling interests have been recorded at carrying value.

Generally, the holders of the Common Units share in any distributions by GGPOP with our common stockholders. However, the GGPOP operating partnership agreement permits distributions solely to GGP if such distributions were required to allow GGP to comply with the REIT distribution requirements or to avoid the imposition of excise tax. Under certain circumstances, the conversion rate for each Common Unit is required to be adjusted to give effect to stock distributions. If the holders had requested redemption of the Common and Preferred Units as of December 31, 2017, the aggregate amount of cash we would have paid would have been $195.9 million and $52.3 million, respectively.

GGPOP issued Preferred Units that are, or were, convertible into Common Units of GGPOP at the rates below (subject to adjustment). The holder may convert the Series D and Series E Preferred Units into Common Units of GGPOP at any time, subject to certain restrictions. The Common Units are convertible into common stock at approximately a one-to-one ratio at the current stock price.

Number of Common
Units for each
Preferred Unit Number of
Contractual
Convertible
Preferred Units
Outstanding as of Converted Basis to
Common Units
Outstanding as of Conversion Price Redemption Value
December 31, 2017 December 31, 2017
Series B (1) 3.00000
10
—
$ 16.66670
486
Series D 1.50821
533
835
33.15188
26,637
Series E 1.29836
503
679
38.51000
25,133

$ 52,256

⁽¹⁾

The partnership obtained control of GGP during the third quarter of 2018 following the acquisition of the common shares not previously held by the partnership and its subsidiaries. As a result of ~~July 10, 2017,~~ the ~~Series B preferred unit conversion option expired~~acquisition, GGP’s interest in joint ventures of $10,829 million was added to the balance of equity accounted investments, offset by the deconsolidation of the partnership’s 34% interest of $7,843 million and fair value loss of $502 million from adjusting the partnership’s interest in GGP to its fair value immediately prior to acquiring control. See Note 4, Acquisition of GGP Inc., for further information.


⁽²⁾	The partnership’s interest in the Diplomat was reclassified to assets held for sale in the fourth quarter of 2019. The partnership’s interest in China Xintiandi (“CXTD”) was reclassified to assets held for sale in the fourth quarter of 2018 and sold in the first quarter in 2019.


⁽³⁾	Includes the impact of the deconsolidation of BSREP III investments, primarily Forest City. See above for further information.

⁽⁴⁾

The partnership acquired an incremental interest in Park Meadows in Colorado, Towson Town Center in Maryland, Perimeter Mall in Georgia, Shops at Merrick Park in Florida and 730 Fifth Avenue in New York during 2019, bringing its ownership in each of the malls to 100%. As a result, the partnership now ~~has~~consolidate its interest in the assets. The partnership also acquired an incremental interest in One and Two London Wall Place in London during 2019. As a ~~fixed cash liquidation~~result, the partnership now consolidates its interest in the assets.

The key valuation metrics for the partnership’s commercial properties held within the partnership’s equity accounted investments are set forth in the table below on a weighted-average basis:



		Dec. 31, 2019					Dec. 31, 2018
Equity accounted investments	Primary valuation method	Discount rate		Terminal capitalization rate		Investment horizon (yrs.)	Discount rate		Terminal capitalization rate		Investment horizon (yrs.)
Core Office
United States	Discounted cash flow	6.8	%	4.9	%	11	6.6	%	5.1	%	10
Australia	Discounted cash flow	6.5	%	5.2	%	10	6.7	%	5.7	%	10
Europe	Discounted cash flow	4.6	%	5.0	%	10	4.7	%	4.9	%	10
Core Retail
United States	Discounted cash flow	6.3	%	4.9	%	10	6.6	%	5.3	%	11
LP Investments - Office	Discounted cash flow	6.0	%	5.3	%	10	6.9	%	5.2	%	9
LP Investments - Retail	Discounted cash flow	7.4	%	6.2	%	10	8.4	%	7.1	%	10
Multifamily⁽¹⁾	Direct capitalization	5.3	%	n/a		n/a	5.2	%	n/a		n/a


⁽¹⁾	The valuation method used to value ~~of $50 per unit.~~multifamily investments is the direct capitalization method. The rates presented as the discount rate relate to the overall implied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.

The following ~~table reflects~~tables present the ~~activity~~gross assets and liabilities of the ~~redeemable noncontrolling interests~~partnership’s equity accounted investments as of December 31, 2019 and 2018:



	Dec. 31, 2019
(US$ Millions)	Current assets		Non-current assets		Current liabilities		Non-current liabilities		Net assets
Joint ventures
Canary Wharf Joint Venture	$	1,219	$	13,432	$	1,344	$	6,151	$	7,156
Ala Moana	99		5,717		43		1,882		3,891
Manhattan West	215		6,502		1,659		1,633		3,425
BPR JV Pool A	218		5,862		125		2,191		3,764
BPR JV Pool B	230		6,085		102		3,534		2,679
Fashion Show	38		2,475		20		828		1,665
BPR JV Pool C	41		2,295		34		666		1,636
Grace Building	44		2,304		16		896		1,436
BPR JV Pool D	50		2,183		82		790		1,361
Southern Cross East	6		933		7		—		932
The Grand Canal Shoppes	54		1,782		35		974		827
One Liberty Plaza	28		1,666		39		854		801
680 George Street	3		680		4		—		679
Brazil Retail	31		1,024		11		95		949
Baybrook Mall	14		883		11		236		650
D.C. Fund	50		1,298		190		604		554
The Mall in Columbia	27		867		9		321		564
BPR JV Pool F	9		768		5		227		545
BPR JV Pool G	13		733		15		360		371
Miami Design District	53		1,683		29		570		1,137
Other⁽¹⁾	1,821		14,706		1,971		6,236		8,320
	4,263		73,878		5,751		29,048		43,342
Associates
Other	123		1,837		35		1,045		880
	123		1,837		35		1,045		880
Total	$	4,386	$	75,715	$	5,786	$	30,093	$	44,222


⁽¹⁾	BPR JV Pool E, Forest City Joint Ventures and The Shops at Merrick Park are included in Other for the current year as they have carrying values of nil due to transaction activity and deconsolidation during 2019.



	Dec. 31, 2018
(US$ Millions)	Current assets		Non-current assets		Current liabilities		Non-current liabilities		Net assets
Joint ventures
Canary Wharf Joint Venture	$	666	$	12,268	$	577	$	5,818	$	6,539
BPR JV Pool A	186		5,619		125		2,097		3,583
Manhattan West	142		5,455		681		2,027		2,889
Ala Moana	91		5,063		57		1,874		3,223
Forest City	308		7,729		330		4,152		3,555
BPR JV Pool B	99		5,909		107		3,515		2,386
Fashion Show	35		2,572		19		826		1,762
BPR JV Pool C	42		2,264		34		676		1,596
BPR JV Pool D	43		2,293		101		793		1,442
BPR JV Pool E	47		2,756		39		967		1,797
The Grand Canal Shoppes	28		1,832		23		625		1,212
Grace Building	32		2,043		19		894		1,162
One Liberty Plaza	107		1,604		23		855		833
Southern Cross East	5		805		7		—		803
680 George Street	10		1,334		14		—		1,330
Brazil Retail	30		916		13		67		866
D.C. Fund	58		1,321		31		770		578
Miami Design District	49		1,877		28		629		1,269
The Mall in Columbia	14		858		9		328		535
Shops at Merrick Park	12		660		21		166		485
Other	1,989		20,588		2,413		9,140		11,024
	3,993		85,766		4,671		36,219		48,869
Associates
Diplomat	24		837		23		405		433
BPREP	12		1,998		12		457		1,541
Other	366		1,430		72		819		905
	402		4,265		107		1,681		2,879
Total	$	4,395	$	90,031	$	4,778	$	37,900	$	51,748

Summarized financial information in respect of the partnership’s equity accounted investments for the years ended December 31, 2019, 2018 and 2017 ~~2016, and 2015.~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

is set out below:

Balance at January 1, 2015 $ 299,296
Net income 7,466
Distributions (4,258 )
Redemption of operating partnership units (805 )
Other comprehensive income (233 )
Fair value adjustment for noncontrolling interests in Operating Partnership (13,839 )
Balance at December 31, 2015 $ 287,627
Balance at January 1, 2016 287,627
Net income 7,051
Distributions (5,449 )
Redemption of operating partnership units (2,120 )
Preferred Unit Redemption to Common Stock (3,205 )
Other comprehensive income (2 )
Fair value adjustment for noncontrolling interests in Operating Partnership (21,175 )
Balance at December 31, 2016 $ 262,727
Balance at January 1, 2017 $ 262,727
Net income 4,830
Distributions (6,573 )
Redemption of operating partnership units (651 )
Other comprehensive income (89 )
Fair value adjustment for noncontrolling interests in Operating Partnership (12,118 )
Balance at December 31, 2017 $ 248,126



	Year ended December 31, 2019
(US$ Millions)	Revenue		Expenses		Fair value gains (losses)			Income from EAI⁽¹⁾		Net income			Other compre- hensive income			Partnership’s share of net income			Distributions received
Joint ventures
Canary Wharf Joint Venture	$	555	$	320	$	126		$	22	$	383		$	(11	)	$	191		$	9
Ala Moana	300		149		758			—		909			—			455			48
Manhattan West	201		136		155			—		220			(43		)	123			42
BPR JV Pool A	379		214		172			—		337			—			168			6
BPR JV Pool B	564		350		(50		)	65		229			—			116			—
Fashion Show	118		57		(112		)	—		(51		)	—			(26		)	15
BPR JV Pool C	158		73		7			—		92			—			46			10
Grace Building	107		84		215			—		238			—			119			—
BPR JV Pool D	—		—		(49		)	64		15			—			8			5
Southern Cross East	42		6		110			—		146			—			73			5
The Grand Canal Shoppes	138		73		(44		)	—		21			—			11			21
One Liberty Plaza	134		84		(25		)	—		25			(33		)	13			9
680 George Street	36		9		47			—		74			—			37			15
Brazil Retail	59		54		157			—		162			—			75			39
Baybrook Mall	45		26		204			—		223			—			114			—
D.C. Fund	125		82		(50		)	—		(7		)	—			(4		)	—
The Mall in Columbia	56		29		5			—		32			—			16			—
BPR JV Pool F	39		17		178			—		200			—			102			—
BPR JV Pool G	53		32		50			—		71			—			48			—
Miami Design District	72		67		(234		)	—		(229		)	—			(51		)	—
Other⁽²⁾	1,746		1,217		349			11		889			(17		)	359			142
	4,927		3,079		1,969			162		3,979			(104		)	1,993			366
Associates
Diplomat	172		181		(6		)	—		(15		)	—			(13		)	73
BPREP	—		—		—			—		—			—			—			—
Other	216		251		(10		)	3		(42		)	50			(11		)	31
	388		432		(16		)	3		(57		)	50			(24		)	104
Total	$	5,315	$	3,511	$	1,953		$	165	$	3,922		$	(54	)	$	1,969		$	470


⁽¹⁾	Share of net earnings from equity accounted investments recorded by the partnership’s joint ventures and associates.


⁽²⁾	Includes BPR JV Pool E, Forest City Joint Ventures and The Shops at Merrick Park for the current year as they have carrying values of nil due to transaction activity and deconsolidation during 2019.

~~Common Stock Dividend and Purchase of Common Stock~~

~~Our Board of Directors declared common stock dividends during 2017 and 2016 as follows:~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

Declaration Date Record Date Payment Date Dividend Per Share
2018
February 7 April 13, 2018 April 30, 2018
$ 0.22
2017
October 31 December 15, 2017 January 5, 2018 $ 0.22
August 2 October 13, 2017 October 31, 2017 0.22
May 1 July 13, 2017 July 28, 2017 0.22
January 30 April 13, 2017 April 28, 2017 0.22
2016
December 13 December 27, 2016 January 27, 2017 $ 0.26
October 31 December 15, 2016 January 6, 2017 0.22
August 1 October 14, 2016 October 31, 2016 0.20
May 2 July 15, 2016 July 29, 2016 0.19
February 1 April 15, 2016 April 29, 2016 0.19

Distributions paid on our common stock and their tax status, as sent to our shareholders, is presented in the following table. The tax status of GGP distributions in 2017, 2016, and 2015 may not be indicative of future periods.

Year Ended December 31,
2017 2016 2015
Ordinary income $ 0.861
$ 0.685
$ 0.752
Capital gain distributions —
0.300
—
Distributions per share $ 0.861
$ 0.985
$ 0.752

Our Dividend Reinvestment Plan ("DRIP") provides eligible holders of GGP's common stock with a convenient method of increasing their investment in the Company by reinvesting all or a portion of cash dividends in additional shares of common stock. Eligible stockholders who enroll in the DRIP on or before the fourth business day preceding the record date for a dividend payment will be able to have that dividend reinvested. As a result of the DRIP elections, 43,732 shares were issued during the year ended December 31, 2017 and 32,381 shares were issued during the year ended December 31, 2016.

~~Preferred Stock~~

On February 13, 2013, we issued, in a public offering, 10,000,000 shares of 6.375% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") at a price of $25.00 per share, resulting in net proceeds of $242.0 million after issuance costs. The Preferred Stock is recorded net of issuance costs within equity on our Consolidated Balance Sheets, and accrues a quarterly dividend at an annual rate of 6.375%. The dividend is paid in arrears in preference to dividends on our common stock, and reduces net income available to common stockholders, and therefore, earnings per share.

The Preferred Stock does not have a stated maturity date but we may redeem the Preferred Stock after February 12, 2018, for $25.00 per share plus all accrued and unpaid dividends. We may redeem the Preferred Stock prior to February 12, 2018, in limited circumstances that preserve ownership limits and/or our status as a REIT, as well as during certain circumstances surrounding a change of control. Upon certain circumstances surrounding a change of control, holders of Preferred Stock may elect to convert each share of their Preferred Stock into a number of shares of GGP common stock equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 common shares (subject to certain adjustments related to GGP common share splits, subdivisions, or combinations).

~~Our Board of Directors declared preferred stock dividends during 2017 and 2016 as follows:~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

Declaration Date Record Date Payment Date Dividend Per Share

February 7 March 15, 2018 April 2, 2018 $ 0.3984
2017
October 31 December 15, 2017 January 2, 2018 $ 0.3984
August 2 September 15, 2017 October 2, 2017 0.3984
May 1 June 15, 2017 July 3, 2017 0.3984
January 30 March 15, 2017 April 3, 2017 0.3984
2016
October 31 December 15, 2016 January 3, 2017 $ 0.3984
August 1 September 15, 2016 October 3, 2016 0.3984
May 2 June 15, 2016 July 1, 2016 0.3984
February 1 March 15, 2016 April 1, 2016 0.3984

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 11 EARNINGS PER SHARE~~

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effect of the Warrants and the dilutive effect of options and their equivalents (including fixed awards and nonvested stock issued under stock-based compensation plans), are computed using the “treasury” method.

~~Information related to our EPS calculations is summarized as follows:~~

Year Ended December 31,
2017 2016 2015
Numerators—Basic:

Net income 666,873
1,308,273
1,393,596
Preferred Stock dividend (15,936 ) (15,935 ) (15,937 )
Allocation to noncontrolling interests (9,539 ) (19,906 ) (19,035 )
Net income attributable to common stockholders $ 641,398
$ 1,272,432
$ 1,358,624
Numerators—Diluted:

Net income attributable to common stockholders $ 641,398
$ 1,272,432
$ 1,358,624
Diluted net income attributable to common stockholders $ 641,398
$ 1,272,432
$ 1,358,624
Denominators:

Weighted-average number of common shares outstanding—basic 897,156
884,029
884,676
Effect of dilutive securities 50,403
68,304
66,386
Weighted-average number of common shares outstanding—diluted 947,559
952,333
951,062
Anti-dilutive Securities:

Effect of Preferred Units 1,514
5,209
5,415
Effect of Common Units 6,592
4,782
4,783
Effect of LTIP Units 1,836
1,767
1,609
9,942
11,758
11,807

Options were dilutive for the years ended December 31, 2017, 2016 and 2015 and are included in the denominator of EPS. Warrants were dilutive for the years ended December 31, 2017, 2016 and 2015 and are included in the denominator of EPS.

Outstanding Common Units and LTIP Units have also been excluded from the diluted earnings per share calculation because including such units would also require that the share of GGPOP income attributable to such units be added back to net income therefore resulting in no effect on EPS. Outstanding Preferred Units have been excluded from the diluted EPS calculation for all periods presented because including the Preferred Units would also require that the Preferred Units dividend be added back to the net income, resulting in anti-dilution. During the year ended December 31, 2017, Brookfield, Abu Dhabi Investment Authority and Future Fund Board of Guardians exercised Warrants for 83,866,187 shares of common stock using both full and net share settlement.

During the year ended December 31, 2015 GGP repurchased 4,324,489 shares of its common stock for $109.5 million. Of the shares repurchased, 270,869 had not been canceled as of December 31, 2015. As a result, these shares are presented as common stock in treasury, at cost on our Consolidated Balance Sheets. Accordingly, these shares have been excluded from the calculation of EPS.

During the year ended December 31, 2016 GGP repurchased 1,887,751 shares of its common stock for $46.2 million. Of the shares repurchased, 627,261 had not been canceled as of December 31, 2016. As a result, these shares are presented as common stock in treasury, at cost on our Consolidated Balance Sheets. Accordingly, these shares have been excluded from the calculation of EPS.

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

During the year ended December 31, 2017 GGP repurchased 12,650,991 shares of its common stock for $273.7 million. As a result, these shares are presented as common stock in treasury, at cost on our Consolidated Balance Sheets. Accordingly, these shares have been excluded from the calculation of EPS.

~~NOTE 12 STOCK-BASED COMPENSATION PLANS~~

~~Incentive Stock Plans~~

The GGP Inc. 2010 Equity Plan (the "Equity Plan") reserved for issuance of 4% of outstanding shares on a fully diluted basis. The Equity Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation (collectively, "the Awards"). Directors, officers and other employees of GGP's and its subsidiaries and affiliates are eligible for Awards. The Equity Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended. No participant may be granted more than 4,000,000 shares, or the equivalent dollar value of such shares, in any year. Options granted under the Equity Plan will be designated as either nonqualified stock options or incentive stock options. An option granted as an incentive stock option will, to the extent it fails to qualify as an incentive stock option, be treated as a nonqualified option. The exercise price of an option may not be less than the fair value of a share of GGP's common stock on the date of grant. The term of each option will be determined prior to the date of grant, but may not exceed 10 years.

~~Stock Options~~

Stock options under the Equity Plan generally vest in 25% increments annually from one year from the grant date (subject to certain exceptions in the case of retirement). Options under certain previous equity plans were replaced under the Equity Plan with options, fully vested, in GGP common stock.

~~The following tables summarize stock option activity for the Equity Plan for GGP for the years ended December 31, 2017, 2016 and 2015:~~

2017 2016 2015
Shares Weighted
Average
Exercise
Price Shares Weighted
Average
Exercise
Price (2) Shares Weighted
Average
Exercise
Price (2)
Stock options Outstanding at January 1, 15,277,189
$ 17.90
18,162,700
$ 17.34
19,744,224
$ 17.18
Granted (1) —
—
247,592
20.81
267,253
28.86
Exercised (690,969 ) 18.00
(2,886,986 ) 14.45
(1,374,512 ) 16.54
Forfeited (153,822 ) 22.47
(230,509 ) 19.94
(460,588 ) 19.78
Expired (5,295 ) 28.86
(15,608 ) 17.73
(13,677 ) 17.17
Stock options Outstanding at December 31, 14,427,103
$ 17.84
15,277,189
$ 17.90
18,162,700
$ 17.34

(1) Included in 2016 grants are 156,331 units related to additional grants required as a result of antidilution provisions triggered by our 2016 distribution of a special dividend declared on December 13, 2016 (Note 10).

~~(2) Changes to prior year weighted average exercise price is due to adjustment of the strike price for the special dividend issued in 2016.~~

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

Stock Options Outstanding Stock Options Exercisable
Range of Exercise Prices Shares Weighted Average
Remaining Contractual
Term (in years) Weighted
Average
Exercise
Price Shares Weighted Average
Remaining Contractual
Term (in years) Weighted
Average
Exercise
Price
$8.00 - $12.00 1,010,350
2.83
$ 9.60
1,010,350
2.83
$ 9.60
$13.00 - $17.00 3,829,926
3.30
14.53
3,829,926
3.30
14.53
$18.00 - $23.00 9,339,190
5.16
19.82
8,490,390
5.17
19.89
$24.00 - $30.00 247,637
6.39
$ 28.24
129,496
5.58
$ 28.32
Total 14,427,103
4.53
$ 17.84
13,460,162
4.47
$ 17.68
Intrinsic value ($23.39 stock price as of December 31, 2017) $ 80,022

$ 76,902

There were no stock options granted in 2017. The weighted-average fair value of stock options as of the grant date was $4.52 for stock options granted during the year ended December 31, 2016, excluding 156,331 of special dividend shares granted during 2016 as a result of antidilution provisions that were triggered by a special dividend distribution. The intrinsic value of stock options exercised during the year was $3.9 million, $42.1 million, and $22.9 million for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.

~~Restricted Stock~~

Pursuant to the Equity Plan, GGP made restricted stock grants to certain employees and non-employee directors. The vesting terms of these grants are specific to the individual grant. The vesting terms varied in that a portion of the shares vested either immediately or on the first anniversary and the remainder vested in the equal annual amounts over the next two to five years. Participating employees were required to remain employed for vesting to occur (subject to certain exceptions in the case of retirement). Shares that did not vest were forfeited. Dividends are paid on restricted stock and are not returnable, even if the underlying stock does not ultimately vest. The following table summarizes restricted stock activity for the respective grant year ended December 31, 2017, December 31, 2016 and December 31, 2015:

2017 2016 2015
Shares Weighted
Average Grant
Date Fair Value Shares Weighted
Average Grant
Date Fair Value Shares Weighted
Average Grant
Date Fair Value
Nonvested restricted stock grants outstanding as of beginning of period 453,596
$ 27.16
206,219
$ 29.16
104,142
$ 14.79
Granted 771,960
24.77
329,326
26.20
253,886
29.12
Vested (174,806 ) 26.76
(71,570 ) 28.48
(114,563 ) 16.75
Canceled (68,221 ) 26.24
(10,379 ) 27.28
(37,246 ) 26.86
Nonvested restricted stock grants outstanding as of end of period 982,529
$ 25.42
453,596
$ 27.16
206,219
$ 29.16

The weighted average remaining contractual term of nonvested awards as of December 31, 2017 was 2.7 years. The fair value of shares vested during the year was $4.7 million, $2.0 million, and $3.0 million for the year ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.

~~LTIP Units~~

Pursuant to the Equity Plan, GGP made LTIP Unit grants to certain employees and non-employee directors. The vesting terms of these grants are specific to the individual grant. A portion of the shares vest either immediately or on the first anniversary and the remainder vest in equal annual amounts over the next two to four years. Participating employees are required to remain employed for vesting to occur (subject to certain exceptions in the case of retirement).

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~The following table summarizes LTIP Unit activity for the Equity Plan for GGP for the years ended December 31, 2016 and December 31, 2015:~~

2017 2016 2015
Shares
Weighted
Average Grant
Date Fair Value
Shares
Weighted
Average Grant
Date Fair Value
Shares
Weighted
Average Grant
Date Fair Value (2)
LTIP Units Outstanding at January 1, 3,775,802
$ 27.40
1,724,747
$ 29.32
—
$ —
Granted (1) 122,547
25.40
2,089,917
25.84
1,758,396
29.32
Exercised (92,880 ) 29.15
—
—
—
—
Forfeited (25,565 ) 27.69
(38,862 ) 28.95
(33,649 ) 29.04
Expired —
—
—
—
—
—
LTIP Units Outstanding at December 31, 3,779,904
$ 27.29
3,775,802
$ 27.40
1,724,747
$ 29.32



	Year ended December 31, 2018
(US$ Millions)	Revenue		Expenses			Fair value gains (losses)			Income from EAI⁽¹⁾			Net income			Other compre- hensive income			Partnership’s share of net income			Distributions received
Joint ventures
Canary Wharf Joint Venture	$	547	$	125		$	(72	)	$	(1	)	$	349		$	8		$	175		$	—
BPR JV Pool A	162		77			(5		)	—			80			—			41			—
Manhattan West	123		104			423			—			442			(15		)	248			—
Ala Moana	78		38			(6		)	—			34			—			17			8
Forest City	48		35			—			—			13			—			8			—
BPR JV Pool B	208		112			(7		)	8			97			—			49			1
Fashion Show	32		13			(2		)	—			17			—			8			3
BPR JV Pool C	52		23			(1		)	—			28			—			14			6
BPR JV Pool D	—		—			—			26			26			—			12			2
BPR JV Pool E	49		15			(2		)	—			32			—			11			3
The Grand Canal Shoppes	30		18			(1		)	—			11			—			5			2
Grace Building	125		83			(34		)	—			8			—			4			8
One Liberty Plaza	114		84			9			—			39			(10		)	21			9
Southern Cross East	45		7			38			—			76			—			38			—
680 George Street	34		9			136			—			161			—			56			18
Brazil Retail	61		30			59			—			90			—			41			20
D.C. Fund	131		81			(45		)	—			5			—			2			22
Miami Design District	24		24			(1		)	—			(1		)	—			—			—
The Mall in Columbia	19		9			(1		)	—			9			—			5			—
Shops at Merrick Park	17		6			—			—			11			—			6			1
Other	1,290		897			696			(22		)	1,067			(19		)	409			143
	3,189		1,790			1,184			11			2,594			(36		)	1,170			246
Associates
GGP⁽²⁾	1,536		1,221			(1,598		)	271			(1,012		)	(15		)	(274		)	214
CXTD⁽³⁾	142		60			18			(3		)	97			—			21			10
Diplomat	174		175			—			—			(1		)	77			(1		)	18
BPREP	60		(10		)	1			—			71			—			9			4
Other	263		261			71			1			74			76			22			26
	2,175		1,707			(1,508		)	269			(771		)	138			(223		)	272
Total	$	5,364	$	3,497		$	(324	)	$	280		$	1,823		$	102		$	947		$	518


⁽¹⁾	~~Included in 2016 grants are 19,064 units related to additional grants required as a result~~Share of ~~antidilution provisions triggered~~net earnings from equity accounted investments recorded by ~~our 2016 distribution of a special dividend declared on December 13, 2016 (Note 10).~~the partnership’s joint ventures and associates.


⁽²⁾	~~Changes~~Includes net income presented before allocation to non-controlling interests and preferred dividends from GGP prior to the GGP acquisition in the third quarter of 2018.


⁽³⁾	The partnership sold it’s interest in CXTD in the first quarter of 2019.



	Year ended December 31, 2017
(US$ Millions)	Revenue		Expenses		Fair value gains (losses)			Income of EAI⁽¹⁾		Net income			Other compre- hensive income			Partnership’s share of net income			Distributions received
Joint ventures
Canary Wharf Joint Venture	$	581	$	370	$	(49	)	$	21	$	183		$	5		$	91		$	—
Manhattan West	81		70		308			—		319			—			179			1
Grace Building	120		80		(23		)	—		17			—			9			7
One Liberty Plaza	3		2		103			—		104			(7		)	53			—
Southern Cross East	46		7		21			—		60			—			30			—
Brazil Retail	48		29		31			—		50			—			23			11
680 George Street	34		9		17			—		42			—			21			—
D.C. Fund	129		76		(54		)	—		(1		)	—			(1		)	23
VAMF II⁽²⁾	154		116		117			4		159			—			59			—
Principal Place - Commercial⁽²⁾	28		61		132			—		99			—			49			—
Potsdamer Platz⁽²⁾	96		95		108			—		109			—			27			—
One New York Plaza⁽²⁾	121		78		(4		)	—		39			7			6			1
Republic Plaza⁽²⁾	46		30		(33		)	—		(17		)	—			(9		)	—
75 State Street⁽²⁾	49		30		6			—		25			—			6			2
245 Park Avenue	54		31		(24		)	—		(1		)	—			—			10
Other	259		111		148			—		296			16			153			38
	1,849		1,195		804			25		1,483			21			696			93
Associates
GGP⁽³⁾⁽⁴⁾	2,405		1,207		(2,307		)	518		(591		)	12			179			240
CXTD⁽⁵⁾	128		145		121			—		104			—			23			—
Diplomat	151		166		—			—		(15		)	43			(14		)	6
BPREP	40		27		31			71		115			—			12			3
Other	253		183		147			—		217			61			65			27
	2,977		1,728		(2,008		)	589		(170		)	116			265			276
Total	$	4,826	$	2,923	$	(1,204	)	$	614	$	1,313		$	137		$	961		$	369


⁽¹⁾	Share of net earnings from equity accounted investments recorded by the partnership’s joint ventures and associates.


⁽²⁾	In the current year ~~weighted average grant date~~ended December 31, 2019, these joint ventures are presented within Joint Ventures - Other.


⁽³⁾	Includes net income presented before allocation to non-controlling interests and preferred dividends from GGP prior to the GGP acquisition in the third quarter of 2018.

⁽⁴⁾

As a result of the partnership’s exercise of GGP warrants in 2017, the additional shares that were acquired by the partnership were acquired at a discount to the net fair value ~~is due to adjustment~~ of the ~~strike price for~~proportionate interest in the ~~special dividend issued~~underlying assets acquired and liabilities assumed. The partnership recognized a $442 million gain within the partnership’s share of net income.


⁽⁵⁾	The partnership sold it’s interest in ~~2016.~~CXTD in the first quarter of 2019.

~~Performance Equity Compensation~~

~~Pursuant to~~Certain of the ~~Equity Plan, GGP~~partnership’s investment in joint ventures and ~~GGP Inc. made performance restricted stock and LTIP Unit (“equity performance instruments”) grants to certain employees. These grants~~associates are subject to ~~certain performance vesting conditions based on Relative TSR~~restrictions over the extent to which they can remit funds to the partnership in the form of the ~~Equity REIT Index, Relative TSR~~cash dividends or repayments of loans and advances as a result of borrowing arrangements, regulatory restrictions and other contractual requirements.

NOTE 8. INVESTMENTS IN JOINT OPERATIONS

The partnership’s interests in the following properties are subject to joint control and, accordingly, the partnership has recorded its share of the ~~Retail REIT Index, TSR growth~~assets, liabilities, revenues, and expenses of the ~~company,~~properties in these consolidated financial statements:



		Place of incorporation and principal place of business	Ownership⁽¹⁾
Name of property	Principal activity	Place of incorporation and principal place of business	Dec. 31, 2019		Dec. 31, 2018
Brookfield Place - Retail & Parking	Property	Toronto	56	%	56	%
Brookfield Place III	Development property	Toronto	54	%	54	%
Exchange Tower	Property	Toronto	50	%	50	%
First Canadian Place⁽²⁾	Property	Toronto	25	%	25	%
2 Queen Street East	Property	Toronto	25	%	25	%
Bankers Hall	Property	Calgary	50	%	50	%
Bankers Court	Property	Calgary	50	%	50	%
Bankers West Parkade	Development property	Calgary	50	%	50	%
Suncor Energy Centre	Property	Calgary	50	%	50	%
Fifth Avenue Place	Property	Calgary	50	%	50	%
Place de Ville I	Property	Ottawa	25	%	25	%
Place de Ville II	Property	Ottawa	25	%	25	%
300 Queen Street	Development property	Ottawa	25	%	25	%
52 Goulburn Street⁽³⁾	Property	Sydney	24	%	50	%
235 St Georges Terrace⁽³⁾	Property	Perth	24	%	50	%
108 St Georges Terrace⁽³⁾	Property	Perth	50	%	50	%
Southern Cross West⁽³⁾	Property	Melbourne	50	%	50	%
Shopping Patio Higienópolis	Property	São Paulo	25	%	25	%
Shopping Patio Higienópolis - Expansion	Development property	São Paulo	32	%	32	%
Shopping Patio Higienópolis - Co-Invest	Property	São Paulo	5	%	5	%
Shopping Patio Higienópolis Expansion - Co-Invest	Development property	São Paulo	6	%	6	%
G2-Infospace Gurgaon	Property	NCR-Delhi Region	72	%	72	%


⁽¹⁾	Represents ownership in these properties before non-controlling interests in subsidiaries that hold these ownership interests.


⁽²⁾	First Canadian Place in Toronto is subject to a ground lease with respect to 50% of the land on which the property is situated. At the expiry of the ground lease, the other land owner will have the option to acquire, for a nominal amount, an undivided 50% beneficial interest in the property.


⁽³⁾	The partnership exercised joint control over these assets through a participating loan agreement with Brookfield Asset Management. The partnership converted its interest into a direct equity interest in the entities with a direct co-ownership interest in the underlying assets.

NOTE 9. PARTICIPATING LOAN INTERESTS

Participating loan interests represented interests in certain properties in Australia that did not provide the partnership with control over the entity that owns the underlying property and ~~FFO Growth~~were held at FVTPL on the consolidated balance sheets. The partnership sold its remaining participating loan interest in Darling Park Complex in Sydney in the third quarter of ~~the company.~~2019. The ~~equity performance~~ instruments, ~~are considered earned based on meeting these performance vesting conditions,~~ which ~~are each weighted 25% and vest at the end~~were receivable from a wholly-owned subsidiary of ~~the three-year performance period. The LTIP Units receive dividends at a ratio of 10% cash and 90% as a dividend reinvestment which is~~Brookfield Asset Management, was subject to the ~~performance vesting conditions~~partnership’s prior right to convert into direct ownership interests in the underlying commercial properties, and ~~three-year performance period.~~had contractual interest rates that vary with the results of operations of those properties.

The outstanding principal of the participating loan interests relates to the following property:



(US$ Millions)	Participation interest				Carrying value
Name of property	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2018
Darling Park Complex, Sydney	—	%	30	%	$	—	$	268
Total participating loan interests					$	—	$	268


⁽¹⁾	The partnership sold the Darling Park Complex in the third quarter of 2019.

For the year ended December 31, 2019, the partnership recognized interest income on the participating loan interests of $8 million (2018 - $17 million; 2017 - $27 million) and fair value gains of $41 million (2018 - $36 million; 2017 - $59 million).

NOTE 10. PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment primarily consists of hospitality assets such as Center Parcs UK, Paradise Island Holdings Limited (“Atlantis”), a portfolio of extended-stay hotels in the United States and a hotel at IFC Seoul.

The following table ~~summarizes performance restricted stock and LTIP Unit activity for~~presents the ~~respective grant years ended December 31, 2017 and December 31, 2016:~~

2017 2016
Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value
Nonvested performance grants outstanding as of beginning of period 593,200
$ 26.07
—
$ —
Granted 554,264
25.11
593,200
26.07
Vested

—
—
Canceled (72,869 ) 25.82
—
—
Nonvested performance grants outstanding as of end of period 1,074,595
$ 25.59
593,200
$ 26.07

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~Other Required Disclosures~~

~~Historical data, such as the past performance~~useful lives of ~~our common stock and the length of service~~each hospitality asset by employees, is used to estimate expected life of the stock options, restricted stock, and LTIP Units and represents the period of time the options or grants are expected to be outstanding. The weighted average estimated values of options granted were based on the following assumptions:class:

Year Ended December 31,
2017 2016 2015
Risk-free interest rate(*) 2.45 % 1.52 % 1.75 %
Dividend yield(*) 3.47 % 3.07 % 2.33 %
Expected volatility 40.00 % 25.00 % 25.00 %
Expected life (in years) 6.25
6.25
6.25

~~(*) Weighted average~~

~~Compensation expense related to stock-based compensation plans is summarized in the following table:~~

Year Ended December 31,
2017 2016 2015
Stock options—Property management and other costs $ 3,366
$ 5,833
$ 7,103
Stock options—General and administrative 7,732
10,448
11,006
Restricted stock—Property management and other costs 5,787
2,860
2,853
Restricted stock—General and administrative 3,357
635
603
LTIP Units—Property management and other costs 1,366
1,346
1,046
LTIP Units—General and administrative 18,621
14,804
10,002
Total $ 40,229
$ 35,926
$ 32,613

~~Unrecognized compensation expense as of December 31, 2017 is as follows:~~

Year Amount
2018 $ 25,369
2019 16,756
2020 5,268
2021 419
47,812

~~These amounts may be impacted by future grants, changes in forfeiture estimates or vesting terms, and actual forfeiture rates which differ from estimated forfeitures.~~

~~GGP INC.~~



Hospitality assets by class	Useful life (in years)
Building and building improvements	5 to 50+
Land improvements	14 to 15
Furniture, fixtures and equipment	2 to 15

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Hospitality properties are accounted for under the revaluation model with revaluation to fair value performed annually at December 31. Significant unobservable inputs (Level 3) in estimating hospitality property values under the revaluation method include estimates of replacement cost and estimates of remaining economic life.

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 13 ACCOUNTS RECEIVABLE~~Hospitality properties with a fair value of approximately $2.8 billion (December 31, 2018 - $2.3 billion) are situated on land held under leases or other agreements largely expiring after the year 2065.

The following table ~~summarizes~~presents the ~~significant~~change to the components of ~~accounts receivable, net.~~the partnership’s hospitality assets from the beginning of the year:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Cost:
Balance, beginning of year	$	7,461		$	5,451
Acquisitions through business combinations	—			1,748
Accounting policy change⁽¹⁾	122			—
Additions	387			490
Disposals	(52		)	(21		)
Foreign currency translation	98			(207		)
Impact of deconsolidation due to loss of control and other⁽²⁾	(770		)	—
	7,246			7,461
Accumulated fair value changes:
Balance, beginning of year	1,049			756
Revaluation gains, net	301			293
Impact of deconsolidation due to loss of control and other⁽²⁾	(7		)	—
	1,343			1,049
Accumulated depreciation:
Balance, beginning of year	(1,004		)	(750		)
Depreciation	(329		)	(291		)
Disposals	30			18
Foreign currency translation	(15		)	19
Impact of deconsolidation due to loss of control and other⁽²⁾	7			—
	(1,311		)	(1,004		)
Total property, plant and equipment	$	7,278		$	7,506

December 31, 2017 December 31, 2016
Trade receivables $ 109,968
$ 107,107
Short-term tenant receivables 4,776
1,414
Straight-line rent receivable 233,630
227,859
Other accounts receivable 5,165
3,699
Total accounts receivable 353,539
340,079
Provision for doubtful accounts (19,458 ) (17,883 )
Total accounts receivable, net $ 334,081
$ 322,196

~~NOTE 14 NOTES RECEIVABLE~~

~~The following table summarizes the significant components of notes receivable, net.~~

December 31, 2017 December 31, 2016
Notes receivable $ 404,129
$ 665,289
Accrued interest 13,429
13,207
Total notes receivable 417,558
678,496

As a result of the transactions described in Note 3, 530 Fifth Avenue and 685 Fifth Avenue are now consolidated. Therefore, the $151.3 million and $48.1 million notes receivable due from our joint venture partner related to the properties at 685 Fifth Avenue and 530 Fifth Avenue, respectively, are presented in the balance sheet as a component of noncontrolling interests in consolidated real estate affiliates. Additionally, the $53.0 million mezzanine loan provided to the 218 W. 57th Street joint venture is eliminated as part of the consolidation of the properties. These amounts appear to reduce the notes receivable balance as of December 31, 2017.

On July 12, 2017, we entered into a promissory note with our joint venture GS Portfolio Holdings II, LLC ("GSPHII"), in which we lent GSPHII $127.4 million that bears interest at 6.6% per annum from July 12, 2017 to December 31, 2017, and 6.3% from January 1, 2018 to December 31, 2018. Interest payments occur a month in arrears, commencing on the first day of the second calendar month with a final payment on the maturity date. The note is collateralized by GSPHII's interest in four anchor boxes (Note 3).

On May 23, 2017, we entered into a promissory note with our joint venture partner, Bayside Equities, LLC ("Bayside Equities"), a subsidiary of AHC, in which we lent Bayside Equities $19.1 million that bears interest at 12.2% per annum. The note is collateralized by Bayside Equities' economic interest in Riverchase Galleria and the Tysons Galleria anchor box.

On July 29, 2016, we settled a note receivable in the net amount of $78.9 million issued to Rique Empreendimentos e Participacoes Ltda. ("Rique") in exchange for approximately 18.3 million shares in Aliansce Shopping Centers, S.A. ("Aliansce"), resulting in an 11.3% ownership in Aliansce. On September 29, 2016, we sold the 18.3 million shares in Aliansce to the Canada Pension Plan Investment Board for a sales price of $84.9 million. The note receivable was issued in conjunction with our sale of Aliansce to Rique and Canada Pension Plan Investment Board on September 30, 2013. The note receivable was denominated in Brazilian Reais, bore interest at an effective interest rate of approximately 14%, was collateralized by shares of common stock in Aliansce, and required annual principal and interest payments over the term. During the year ended 2016, we determined, based on current information and events, that it was probable that we would be unable to collect all amounts due according to the contractual terms of the receivable. As the note receivable was a collateral dependent loan, we estimated the provision for loss based on the fair value of the market price of the Aliansce shares which served as the collateral for the loan. We recognized a $29.6 million loss on the note recorded in the provision for loan loss on the Consolidated Statements of Operations and Comprehensive Income based

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

on the value of the collateral and included accrued interest of $7.5 million in the provision for loan loss. We recognized the impact of changes in the exchange rate on the note receivable as gain or loss on foreign currency in our Consolidated Statements of Operations and Comprehensive Income.

On November 11, 2015, we entered into a promissory note with our joint venture partner, Ashkenazy Holding Co., LLC ("AHC"), in which we lent AHC $57.6 million that bears interest at 8% per annum. The note was collateralized by AHC's equity in Miami Design District Associates, which is part of the AACMDD Group, LLC joint venture ("AACMDD"). On November 18, 2016, the maturity date of the note was amended to November 15, 2019. On June 1, 2017, AHC conveyed the collateral of the note in full satisfaction of the receivable and $2.6 million in accrued interest.

On September 17, 2015, we entered into a promissory note with our joint venture partner, AHC, in which we lent AHC $40.4 million that bears interest at 6% per annum. The note was collateralized by AHC's equity in Miami Design District Associates, which is part of AACMDD. On November 18, 2016, the maturity date of the note was amended to September 17, 2019. On June 1, 2017, AHC conveyed the collateral of the note in full satisfaction of the receivable and $1.1 million in accrued interest.

~~The two AHC promissory notes discussed above were collectively collateralized by 7.3% of our joint venture partner's membership interests in Miami Design District.~~

On June 30, 2015, we entered into a promissory note with our joint venture partner MKB (defined in Note 5), in which we would lend MKB up to $80 million for capital calls after an initial contribution of $80 million by MKB and until the joint venture secured construction financing. This loan bears interest at LIBOR plus 6% and is secured by MKB's partnership interest in AMX, which is constructing a luxury residential condominium tower on a site located within the Ala Moana Shopping Center. On August 2, 2017 the outstanding note balance of $17.1 million was paid off. Construction financing closed during the third quarter of 2015.

Notes receivable includes $204.3 million of notes receivable from our joint venture partners related to the acquisition of 730 Fifth Avenue in New York, New York. The first note was issued for $104.3 million to our joint venture partner in the retail portion and bears interest at 8.0% compounded annually and matures on February 12, 2025. The second note was issued for $100.0 million to the joint venture partner acquiring the office portion of the property and bears interest at 8.0% subject to terms and conditions in the loan agreement and matures on April 17, 2025. As of December 31, 2017, there was $157.8 million and $80.0 million outstanding on these loans, respectively.

~~NOTE 15 PREPAID EXPENSES AND OTHER ASSETS~~

~~The following table summarizes the significant components of prepaid expenses and other assets.~~

December 31, 2017 December 31, 2016
Gross Asset
Accumulated
Amortization
Balance Gross Asset
Accumulated
Amortization
Balance
Intangible assets:

Above-market tenant leases, net $ 411,789
$ (313,228 ) $ 98,561
$ 512,802
$ (368,900 ) $ 143,902
Below-market ground leases, net 118,994
(14,870 ) 104,124
118,994
(12,788 ) 106,206
Real estate tax stabilization agreement, net 111,506
(45,081 ) 66,425
111,506
(38,769 ) 72,737
Total intangible assets $ 642,289
$ (373,179 ) $ 269,110
$ 743,302

$ (420,457 ) $ 322,845
Remaining Prepaid expenses and other assets:

Restricted Cash 67,335
56,948
Security and escrow deposits

2,308

2,107
Prepaid expenses

54,987

46,709
Other non-tenant receivables

31,265

34,677
Deferred tax, net of valuation allowances

21,061

6,943
Other

69,790

36,292
Total remaining Prepaid expenses and other assets

246,746

183,676
Total Prepaid expenses and other assets

$ 515,856
$ 506,521

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 16 ACCOUNTS PAYABLE AND ACCRUED EXPENSES~~

~~The following table summarizes the significant components of accounts payable and accrued expenses.~~

December 31, 2017 December 31, 2016
Gross
Liability Accumulated
Accretion Balance Gross
Liability Accumulated
Accretion Balance
Intangible liabilities:

Below-market tenant leases, net $ 348,984
$ (162,228 ) $ 186,756
$ 267,048
$ (172,210 ) $ 94,838
Above-market headquarters office leases, net 4,342
(3,860 ) 482
15,268
(10,346 ) 4,922
Above-market ground leases, net 9,880
(2,648 ) 7,232
9,127
(2,258 ) 6,869
Total intangible liabilities $ 363,206
$ (168,736 ) $ 194,470
$ 291,443
$ (184,814 ) $ 106,629
Remaining Accounts payable and accrued expenses:

Accrued interest

43,874

47,821
Accounts payable and accrued expenses

77,405

87,485
Accrued real estate taxes

78,213

87,313
Deferred gains/income

90,379

91,720
Accrued payroll and other employee liabilities

54,520

57,721
Construction payable

221,172

115,077
Tenant and other deposits

32,106

15,061
Insurance reserve liability

12,035

14,184
Capital lease obligations

5,385

5,386
Conditional asset retirement obligation liability

6,149

5,327
Other (1)

103,724

21,638
Total remaining Accounts payable and accrued expenses

724,962
548,733
Total Accounts payable and accrued expenses

$ 919,432
$ 655,362

~~(1) December 31, 2017 includes special rights related to Seritage (Note 3).~~

~~NOTE 17 ACCUMULATED OTHER COMPREHENSIVE LOSS~~

~~Components of accumulated other comprehensive loss as of December 31, 2017 and 2016 are as follows:~~

December 31, 2017 December 31, 2016
Net unrealized gains on financial instruments $ 116
$ 104
Foreign currency translation (72,022 ) (70,560 )
Accumulated other comprehensive loss $ (71,906 ) $ (70,456 )

~~NOTE 18 LITIGATION~~

In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material effect on our consolidated financial position, results of operations or liquidity. Neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.

~~GGP INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 19 COMMITMENTS AND CONTINGENCIES~~

We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. The following is a summary of our contractual rental expense as presented in our Consolidated Statements of Operations and Comprehensive Income:

Year Ended December 31,
2017 2016 2015
Contractual rent expense, including participation rent $ 8,561
$ 8,589
$ 8,546
Contractual rent expense, including participation rent and excluding amortization of above and below-market ground leases and straight-line rent 6,304
6,278
6,183

~~See Note 7 and Note 18 for our obligations related to uncertain tax positions and for disclosure of additional contingencies.~~

~~The following table summarizes the contractual maturities of our long-term commitments. Long-term debt and ground leases include the related acquisition accounting fair value adjustments:~~

2018 2019 2020 2021 2022 Subsequent/
Other Total
Mortgages, notes and loans payable $ 497,142
$ 1,397,736
$ 1,647,378
$ 2,942,490
$ 1,399,241
$ 4,948,472
$ 12,832,459
Retained debt-principal 1,817
1,919
81,466

—
—
85,202
Purchase obligations 227,923
—
—
—
—
—
227,923
Ground lease payments 6,698
6,790
6,972
7,025
7,036
234,312
268,833
Junior Subordinated Notes(1) —
—
—
—
—
206,200
206,200
Total $ 733,580
$ 1,406,445
$ 1,735,816
$ 2,949,515
$ 1,406,277
$ 5,388,984
$ 13,620,617

⁽¹⁾

~~The $206.2 million~~Includes the impact of ~~Junior Subordinated Notes are due in 2036, but may be redeemed any time after April 30, 2011. As we do not expect to redeem~~ the ~~notes prior to maturity, they are included in~~adoption of IFRS 16 through the ~~consolidated debt maturing subsequent to 2022.~~recognition of right-of-use assets. See Note 2, Summary of Significant Accounting Policies for further information.


⁽²⁾	Includes the impact of the deconsolidation of BSREP III investments. See Note 5, Investment Properties for further information.

NOTE ~~20 SUBSEQUENT EVENTS~~11. GOODWILL

Goodwill of $1,041 million at December 31, 2019 (December 31, 2018 - $1,109 million) was primarily attributable to Center Parcs UK and IFC Seoul. The partnership performs a goodwill impairment test annually by assessing if the carrying value of the cash-generating unit, including the allocated goodwill, exceeds its recoverable amount determined as the greater of the estimated fair value less costs to sell or the value in use.

~~Subsequent to December 31, 2017, no events occurred that require recognition or disclosure~~NOTE 12. INTANGIBLE ASSETS

The partnership’s intangible assets are presented on a cost basis, net of accumulated amortization and accumulated impairment losses in the consolidated ~~financial statements, except as recognized or disclosed previously.~~

~~GGP INC.~~balance sheets. These intangible assets primarily represent the trademark assets related to Center Parcs UK.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~The trademark assets of Center Parcs UK had a carrying amount of $956 million as of December 31, 2019 (December 31, 2018 - $921 million). They have been determined to have an indefinite useful life as the partnership has the legal right to operate these trademarks exclusively in certain territories and in perpetuity. The business model of Center Parcs UK is not subject to technological obsolescence or commercial innovations in any material way.

~~(Dollars in thousands, except per share amounts)~~

~~NOTE 21 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)~~

~~Quarterly data for~~In addition, intangible assets include the ~~year ended~~trademark and licensing assets relating to Atlantis. At December 31, ~~2017 and 2016~~2019, intangible assets of Atlantis had a carrying value of $205 million (December 31, 2018 - $207 million). They have been determined to have an indefinite useful life as the partnership has the legal right to operate these intangible assets granted under perpetual licenses. The business model of Atlantis is ~~summarized~~not subject to technological obsolescence or commercial innovations in the table below. In Q1 2016, Q2 2016 and Q3 2016 they include the impact of provisions for impairment (Note 2). In each quarter of 2016, Q2 2017, Q3 2017 and Q4 2017, the adjustments include gains from changes in control of investment properties in continuing operations. In each quarter of 2016 and Q4 2017, the adjustments include gains on investment in Unconsolidated Real Estate Affiliates (Note 3).

2017
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter
Total revenues $ 566,332
$ 555,796
$ 578,357
$ 627,375
Operating income 192,869
182,793
218,306
244,291
Income from continuing operations 110,369
128,318
226,272
201,914
Net income attributable to common shareholders 103,176
121,879
218,729
197,614

Basic Earnings Per Share 0.12
0.14
0.25
0.21
Diluted Earnings Per Share 0.11
0.13
0.23
0.21
Dividends declared per share 0.22
0.22
0.22
0.22

Weighted-average shares outstanding:

Basic 884,505
882,255
878,663
942,766
Diluted 949,516
945,325
940,184
954,947
any material way.

2016
First Quarter Second
Quarter Third
Quarter Fourth
Quarter
Total revenues $ 607,032
$ 574,586
$ 554,493
$ 610,335
Operating income 173,980
216,035
153,417
256,818
Income from continuing operations 195,337
189,901
681,748
241,284
Net income attributable to common shareholders 187,796
181,962
670,194
232,476

Basic Earnings Per Share 0.21
0.21
0.76
0.26
Diluted Earnings Per Share 0.20
0.19
0.70
0.24
Dividends declared per share 0.19
0.19
0.20
0.48

Weighted-average shares outstanding:

Basic 882,673
883,381
885,092
884,948
Diluted 950,154
952,290
955,856
950,301

~~GGP INC.~~

~~SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION~~

~~DECEMBER 31, 2017~~

~~(Dollars in thousands)~~

Acquisition Cost(b)
Costs Capitalized
Subsequent to
Acquisition

Gross Amounts at Which Carried at
Close of Period(c)

Life Upon
Which
Latest
Statement of
Operation is
Computed
Name of Center Location Encumbrances(a) Land
Buildings
and
Improvements
Land
Buildings
and
Improvements
Land
Buildings and
Improvements
Total
Accumulated
Depreciation
(d)

Date
Acquired

200 LaFayette New York, NY 33,000
29,750
90,674
(9,678 ) (60,874 ) 20,072
29,800
49,872
3,934
April, 2015 (d)
218 W 57th Street New York, NY 53,000
66,978
37,022
—
37
66,978
37,059
104,037
203
September, 2017 (d)
530 5th Avenue New York, NY 132,122
289,494
99,481
—
5,972
289,494
105,453
394,947
1,645
September, 2017 (d)
605 North Michigan Avenue Chicago, IL —
50,980
90,634
—
—
50,980
90,634
141,614
3,371
December, 2016 (d)
685 Fifth Avenue New York, NY 340,000
549,756
117,780
—
725
549,756
118,505
668,261
1,837
September, 2017 (d)
830 North Michigan Avenue Chicago, IL 84,841
33,200
123,553
15,298
9,071
48,498
132,624
181,122
16,488
October, 2013 (d)
Apache Mall Rochester, MN —
17,738
116,663
8,043
15,767
25,781
132,430
158,211
30,638
November, 2010 (d)
Augusta Mall Augusta, GA 169,795
25,450
137,376
—
9,086
25,450
146,462
171,912
36,525
November, 2010 (d)
Baybrook Mall Friendswood, TX 250,214
76,527
288,241
(1,091 ) 9,066
75,436
297,307
372,743
57,441
November, 2010 (d)
Beachwood Place Beachwood, OH 216,640
59,156
196,205
7,354
46,789
66,510
242,994
309,504
40,055
November, 2010 (d)
Bellis Fair Bellingham, WA 84,902
14,122
102,033
—
29,042
14,122
131,075
145,197
27,406
November, 2010 (d)
Boise Towne Square Boise, ID 143,816
44,182
163,118
—
10,037
44,182
173,155
217,337
35,880
November, 2010 (d)
Brass Mill Center Waterbury, CT 65,840
31,496
99,107
—
15,877
31,496
114,984
146,480
27,644
November, 2010 (d)
Coastland Center Naples, FL 116,732
24,470
166,038
—
3,084
24,470
169,122
193,592
32,254
November, 2010 (d)
Columbia Mall Columbia, MO —
7,943
107,969
(154 ) 23
7,789
107,992
115,781
19,609
November, 2010 (d)
Columbiana Centre Columbia, SC 123,115
22,178
125,061
—
6,447
22,178
131,508
153,686
25,625
November, 2010 (d)
Coral Ridge Mall Coralville, IA 108,948
20,178
134,515
2,219
22,805
22,397
157,320
179,717
29,785
November, 2010 (d)
Coronado Center Albuquerque, NM 185,515
28,312
153,526
9,328
91,706
37,640
245,232
282,872
42,879
November, 2010 (d)
Crossroads Center St. Cloud, MN 96,749
15,499
103,077
—
7,201
15,499
110,278
125,777
21,625
November, 2010 (d)
Cumberland Mall Atlanta, GA 159,805
36,913
138,795
(309 ) 17,625
36,604
156,420
193,024
34,067
November, 2010 (d)
Deerbrook Mall Humble, TX 137,830
36,761
133,448
—
17,900
36,761
151,348
188,109
28,284
November, 2010 (d)
Eastridge Mall Casper, WY 42,822
5,484
36,756
—
9,181
5,484
45,937
51,421
15,749
November, 2010 (d)
Fashion Place Murray, UT 226,441
24,068
232,456
2,079
70,863
26,147
303,319
329,466
53,164
November, 2010 (d)
Four Seasons Town Centre Greensboro, NC 30,892
17,259
126,570
—
11,611
17,259
138,181
155,440
41,139
November, 2010 (d)
Fox River Mall Appleton, WI 168,731
42,259
217,932
(103 ) 3,194
42,156
221,126
263,282
41,092
November, 2010 (d)
Glenbrook Square Fort Wayne, IN 161,539
30,965
147,002
2,302
17,351
33,267
164,353
197,620
32,244
November, 2010 (d)
Governor's Square Tallahassee, FL 67,942
18,289
123,088
—
10,410
18,289
133,498
151,787
41,046
November, 2010 (d)
Grand Teton Mall Idaho Falls, ID 44,963
13,066
59,658
(1,073 ) (3,896 ) 11,993
55,762
67,755
12,256
November, 2010 (d)
Greenwood Mall Bowling Green, KY 62,469
12,459
85,370
1,417
6,091
13,876
91,461
105,337
23,144
November, 2010 (d)
Hulen Mall Fort Worth, TX 120,504
8,665
112,252
—
25,842
8,665
138,094
146,759
25,684
November, 2010 (d)
Jordan Creek Town Center West Des Moines, IA 205,145
54,663
262,608
6,042
11,432
60,705
274,040
334,745
50,738
November, 2010 (d)
Lynnhaven Mall Virginia Beach, VA 234,721
54,628
219,013
(90 ) 57,196
54,538
276,209
330,747
54,978
November, 2010 (d)
Mall of Louisiana Baton Rouge, LA 323,854
88,742
319,097
(141 ) 7,123
88,601
326,220
414,821
61,212
November, 2010 (d)
Mall St. Matthews Louisville, KY 180,439
42,014
155,809
(6,522 ) 17,077
35,492
172,886
208,378
34,333
November, 2010 (d)

~~GGP INC.~~

~~SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)~~

~~DECEMBER 31, 2017~~

~~(Dollars in thousands)~~

Acquisition Cost(b)
Costs Capitalized
Subsequent to
Acquisition

Gross Amounts at Which Carried at
Close of Period(c)

Life Upon
Which
Latest
Statement of
Operation is
Computed
Name of Center Location Encumbrances(a) Land
Buildings
and
Improvements
Land
Buildings
and
Improvements
Land
Buildings and
Improvements
Total
Accumulated
Depreciation
(d)

Date
Acquired

Market Place Shopping Center Champaign, IL 113,171
21,611
111,515
—
26,529
21,611
138,044
159,655
28,243
November, 2010 (d)
Mayfair Mall Wauwatosa, WI 344,185
84,473
352,140
(1,950 ) 44,179
82,523
396,319
478,842
70,432
November, 2010 (d)
Meadows Mall Las Vegas, NV 146,186
30,275
136,846
—
2,247
30,275
139,093
169,368
26,020
November, 2010 (d)
Mondawmin Mall Baltimore, MD 84,324
19,707
63,348
—
22,397
19,707
85,745
105,452
20,448
November, 2010 (d)
Neshaminy Mall Bensalem, PA 411
11,615
48,224
4,401
13,943
16,016
62,167
78,183
3,784
June, 2017 (d)
North Point Mall San Antonio, TX 249,669
57,900
228,517
—
7,020
57,900
235,537
293,437
49,746
November, 2010 (d)
North Star Mall Northridge, CA 305,450
91,135
392,422
—
14,271
91,135
406,693
497,828
74,162
November, 2010 (d)
Northridge Fashion Center Alpharetta, GA 224,145
66,774
238,023
—
34,037
66,774
272,060
338,834
51,471
November, 2010 (d)
NorthTown Mall Spokane, WA 85,645
12,310
108,857
—
30,269
12,310
139,126
151,436
26,086
November, 2010 (d)
Oak View Mall Omaha, NE 76,106
20,390
107,216
—
(74 ) 20,390
107,142
127,532
18,952
November, 2010 (d)
Oakwood Center Gretna, LA 85,911
21,105
74,228
4,309
28,833
25,414
103,061
128,475
23,124
November, 2010 (d)
Oakwood Mall Eau Claire, WI 70,229
13,786
92,114
204
5,538
13,990
97,652
111,642
20,261
November, 2010 (d)
Oglethorpe Mall Savannah, GA 149,808
27,075
157,100
—
1,722
27,075
158,822
185,897
28,755
November, 2010 (d)
Oxmoor Center Louisville, KY 85,548
—
117,814
—
13,953
—
131,767
131,767
25,956
November, 2010 (d)
Paramus Park Paramus, NJ 119,570
31,320
102,054
5,563
48,532
36,883
150,586
187,469
24,504
November, 2010 (d)
Park City Center Lancaster, PA 177,419
42,451
195,409
—
4,553
42,451
199,962
242,413
34,943
November, 2010 (d)
Park Place Tucson, AZ 179,268
61,907
236,019
—
7,893
61,907
243,912
305,819
44,985
November, 2010 (d)
Peachtree Mall Columbus, GA 77,102
13,855
92,143
942
8,056
14,797
100,199
114,996
19,132
November, 2010 (d)
Pecanland Mall Monroe, LA 85,354
12,943
73,231
—
11,423
12,943
84,654
97,597
19,541
November, 2010 (d)
Pembroke Lakes Mall Pembroke Pines, FL 259,223
64,883
254,910
—
29,598
64,883
284,508
349,391
46,153
November, 2010 (d)
Pioneer Place Portland, OR 125,792
21,462
97,096
(3,890 ) 107,793
17,572
204,889
222,461
37,024
November, 2010 (d)
Prince Kuhio Plaza Hilo, HI 41,263
—
52,373
—
13,454
—
65,827
65,827
20,583
November, 2010 (d)
Providence Place Providence, RI 377,584
—
400,893
—
65,094
—
465,987
465,987
79,104
November, 2010 (d)
Quail Springs Mall Oklahoma City, OK 67,120
40,523
149,571
(579 ) 7,203
39,944
156,774
196,718
26,505
June, 2013 (d)
Ridgedale Center Minnetonka, MN —
39,495
151,090
3,183
116,722
42,678
267,812
310,490
40,695
November, 2010 (d)
Riverchase Galleria Birmingham, AL 160,997
53,423
271,508
(35,125 ) (9,449 ) 18,298
262,059
280,357
14,465
November, 2016 (d)
River Hills Mall Mankato, MN 70,270
16,207
85,608
—
9,816
16,207
95,424
111,631
17,886
November, 2010 (d)
Rivertown Crossings Grandville, MI 152,432
47,790
181,770
(504 ) 11,072
47,286
192,842
240,128
36,788
November, 2010 (d)
Sooner Mall Norman, OK 71,135
9,902
69,570
—
2,467
9,902
72,037
81,939
14,770
November, 2010 (d)
Southwest Plaza Littleton, CO 114,337
19,024
203,044
(16 ) (12,494 ) 19,008
190,550
209,558
45,416
November, 2010 (d)
Spokane Valley Mall Spokane, WA 56,914
16,817
100,209
—
(7,979 ) 16,817
92,230
109,047
21,580
November, 2010 (d)
Staten Island Mall Staten Island, NY 246,491
102,227
375,612
11,118
57,492
113,345
433,104
546,449
68,158
November, 2010 (d)
Stonestown Galleria San Francisco, CA 179,824
65,962
203,043
(1,686 ) 35,447
64,276
238,490
302,766
38,194
November, 2010 (d)
The Crossroads Portage, MI 93,080
20,261
95,463
1,110
4,054
21,371
99,517
120,888
17,113
November, 2010 (d)

~~GGP INC.~~

~~SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)~~

~~DECEMBER 31, 2017~~

~~(Dollars in thousands)~~


~~(a)~~	~~See description of mortgages, notes and other loans payable in Note 6 of Notes to Consolidated Financial Statements. Includes $1.4 billion cross-collateralized loan.~~

~~(b)Acquisition for individual properties represents historical cost at the end of the month acquired.~~

~~(c)The aggregate cost of land, buildings and improvements of consolidated properties for federal income tax purposes is approximately $15.9 billion.~~

~~(d)Depreciation is computed based upon the following estimated useful lives:~~

~~GGP INC.~~

~~SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)~~

~~DECEMBER 31, 2017~~

~~(Dollars in thousands)~~



Intangible assets by class	Useful life (in years)	~~Years~~
~~Buildings and improvements~~Trademarks	Indefinite	~~10 - 45~~
~~Equipment and fixtures~~Management contracts	40	~~3 - 20~~
~~Tenant improvements~~Customer relationships	9	~~Shorter of useful life or applicable lease term~~
Other	4 to 7

Intangible assets with indefinite useful lives and intangible assets not yet available for use, are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Intangible assets with finite useful lives are amortized over their respective useful lives as listed above. Amortization is recorded as part of depreciation and amortization of non-real estate assets expense.

The following table presents the components of the partnership’s intangible assets as of December 31, 2019 and December 31, 2018:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Cost	$	1,265		$	1,273
Accumulated amortization	(55		)	(46		)
Accumulated impairment losses	(48		)	(48		)
Balance, end of year	$	1,162		$	1,179

The following table presents a roll forward of the partnership’s intangible assets December 31, 2019 and December 31, 2018:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Balance, beginning of year	$	1,179		$	1,188
Acquisitions	9			67
Disposals	—			2
Amortization	(12		)	(17		)
Foreign currency translation	36			(58		)
Impact of deconsolidation due to loss of control and other⁽¹⁾	(50		)	(3		)
Balance, end of year	$	1,162		$	1,179


⁽¹⁾	Includes the impact of deconsolidation of BSREP III investments. See Note 5, Investment Properties for further information.

~~(e)~~NOTE 13. OTHER NON-CURRENT ASSETS

The components of other non-current assets are as follows:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Securities - FVTPL	$	1,250	$	239
Derivative assets	10		13
Securities - FVTOCI	121		260
Restricted cash	154		161
Inventory⁽¹⁾	507		435
Other	284		748
Total other non-current assets	$	2,326	$	1,856


⁽¹⁾	Includes right-of-use inventory of $31 million as of December 31, 2019.

Securities - FVTPL

~~Office~~Securities - FVTPL consists of its convertible preferred units of a U.S. hospitality company. The preferred units earn a cumulative dividend of 7.5% per annum compounding quarterly. Additionally, the partnership receives distributions payable in additional convertible preferred units of the U.S. hospitality operating company at 5.0% per annum compounding quarterly. In 2019, the partnership purchased an additional $238 million of convertible preferred units of a U.S. hospitality operating company.The carrying value of these convertible preferred units as of December 31, 2019 was $418 million (December 31, 2018 - $175 million).

Also included in Securities - FVTPL is the partnership’s investment in BSREP III, which is accounted for as a financial asset following the deconsolidation of its investments in the first quarter of 2019. The carrying value of the BSREP III financial asset as of December 31, 2019 was $417 million (December 31, 2018 - nil).

Securities - FVTOCI

Securities - FVTOCI represented the partnership’s retained equity interests in 1625 Eye Street in Washington, D.C. and Heritage Plaza in Houston, both property holding companies, that it previously controlled and in which it retained a non-controlling interest following disposition of these properties to third parties. The partnership managed these properties on behalf of the acquirer but did not exercise significant influence over the relevant activities of the properties. The interest in 1625 Eye Street was sold as of December 31, 2019.

NOTE 14. ACCOUNTS RECEIVABLE AND OTHER

The components of accounts receivable and other ~~retail properties.~~are as follows:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Derivative assets	$	80	$	234
Accounts receivable⁽¹⁾	510		794
Restricted cash and deposits	239		631
Prepaid expenses	278		317
Other current assets	300		385
Total accounts receivable and other	$	1,407	$	2,361


⁽¹⁾	See Note 36, Related Parties, for further discussion.

NOTE 15. HELD FOR SALE

Non-current assets and groups of assets and liabilities which comprise disposal groups are presented as assets held for sale where the asset or disposal group isavailable for immediate sale in its present condition, and the sale is highly probable.

The following is a summary of the assets and liabilities that were classified as held for sale as of December 31, 2019 and December 31, 2018:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Investment properties	$	160	$	422
Equity accounted investments	223		568
Accounts receivables and other assets	4		14
Assets held for sale	387		1,004
Debt obligations	138		153
Accounts payable and other liabilities	2		10
Liabilities associated with assets held for sale	$	140	$	163

The following table presents the change to the components of the assets held for sale from the beginning of the year:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Balance, beginning of year	$	1,004		$	1,433
Reclassification to/(from) assets held for sale, net	3,387			2,382
Disposals	(4,038		)	(2,819		)
Fair value adjustments	14			81
Foreign currency translation	(5		)	(32		)
Other	25			(41		)
Assets held for sale	$	387		$	1,004

At December 31, 2018, assets held for sale included ten office assets in the United States, three office assets in Brazil, two triple-net lease assets in the United States and an equity accounted investment within the LP Investments portfolio.

In the first quarter of 2019, the partnership sold nine office assets in the United States, three office assets in Brazil, one triple-net lease asset in the United States and an equity accounted investment within the LP Investments portfolio for net proceeds of approximately $844 million.

In the second quarter of 2019, the partnership sold a portfolio of office assets in California and three triple-net lease assets in the United States within the LP Investments portfolio for net proceeds of approximately $129 million.

In the third quarter of 2019, the partnership sold two office assets in Australia in the Core Office segment and a portfolio of triple-net lease assets in the United States and one office asset in the United States in the LP Investments segment for net proceeds of approximately $541 million.

At December 31, 2019, assets held for sale included its equity accounted investment in the Diplomat in Florida, an office asset in California and six triple net lease assets in the United States, as the partnership intends to sell controlling interest in these assets to third parties in the next 12 months.

NOTE 16. DEBT OBLIGATIONS

The partnership’s debt obligations include the following:



	Dec. 31, 2019					Dec. 31, 2018
(US$ Millions)	Weighted- average rate		Debt balance			Weighted- average rate		Debt balance
Unsecured facilities:
Brookfield Property Partners’ credit facilities	3.33	%	$	836		4.08	%	$	1,586
Brookfield Property Partners’ corporate bonds	4.25	%	1,082			4.23	%	586
Brookfield Property REIT Inc. term debt	4.17	%	4,010			4.88	%	4,726
Brookfield Property REIT Inc. senior secured notes	5.75	%	1,000			—	%	—
Brookfield Property REIT Inc. corporate facility	4.03	%	715			4.76	%	387
Brookfield Property REIT Inc. junior subordinated notes	3.39	%	206			3.97	%	206
Forest City Realty Trust Inc. term debt⁽¹⁾	—	%	—			6.38	%	1,247
Subsidiary borrowings	3.27	%	202			5.62	%	495

Secured debt obligations:
Funds subscription credit facilities⁽¹⁾⁽²⁾	2.83	%	57			3.85	%	4,517
Fixed rate	4.35	%	28,717			4.41	%	25,545
Variable rate	4.52	%	19,121			4.97	%	25,131
Deferred financing costs			(418		)			(462		)
Total debt obligations			$	55,528				$	63,964

Current			$	8,825				$	5,874
Non-current			46,565					57,937
Debt associated with assets held for sale			138					153
Total debt obligations			$	55,528				$	63,964


⁽¹⁾	In the first quarter of 2019, the partnership deconsolidated BSREP III due to loss of control. The Forest City term debt and the BSREP III credit facilities are no longer being consolidated. See Note 5, Investment Properties for further information.


⁽²⁾	Funds subscription credit facilities are secured by co-investors’ capital commitments.

Debt obligations include foreign currency denominated debt in the functional currencies of the borrowing subsidiaries. Debt obligations by local currency are as follows:



	Dec. 31, 2019						Dec. 31, 2018
(US$ Millions)	U.S. Dollars			Local currency			U.S. Dollars			Local currency
U.S. dollars	$	39,286		$	$	39,286	$	50,682		$	$	50,682
British pounds	6,997			£	5,279		5,172			£	4,053
Canadian dollars	3,431			C$	4,457		2,688			C$	3,666
South Korean Won	1,973			₩	2,280,000		1,617			₩	1,805,000
Australian dollars	1,273			A$	1,814		1,401			A$	1,988
Indian Rupee	2,209			Rs	157,797		1,469			Rs	102,016
Brazilian reais	480			R$	1,935		684			R$	2,651
China Yuan	11			C¥	78		70			C¥	484
Euros	286			€	255		643			€	561
Deferred financing costs	(418		)				(462		)
Total debt obligations	$	55,528					$	63,964

The components of changes in debt obligations, including changes related to cash flows from financing activities, are summarized in the table below:



				Non-cash changes in debt obligations
(US$ Millions)	Dec. 31, 2018		Debt obligation issuance, net of repayments	Deconsolidation of BSREP III		Debt from asset acquisitions	Assumed by purchaser		Amortization of deferred financing costs and (premium) discount	Foreign currency translation	Other		Dec. 31, 2019
Debt obligations	$	63,964	2,670	(13,601	)	2,751	(128	)	105	251	(484	)	$	55,528

NOTE 17. CAPITAL SECURITIES

The partnership had the following capital securities outstanding as of December 31, 2019 and 2018:



(US$ Millions, except where noted)	Shares outstanding	Cumulative dividend rate		Dec. 31, 2019		Dec. 31, 2018
Operating Partnership Class A Preferred Equity Units:
Series 1	24,000,000	6.25	%	$	574	$	562
Series 2	24,000,000	6.50	%	546		537
Series 3	24,000,000	6.75	%	530		523
Brookfield BPY Holdings Inc. Junior Preferred Shares:
Class B Junior Preferred Shares⁽¹⁾	—	7.64	%	—		420
BPO Class B Preferred Shares:
Series 1⁽²⁾	3,600,000	70% of bank prime		—		—
Series 2⁽²⁾	3,000,000	70% of bank prime		—		—
Brookfield Property Split Corp. (“BOP Split”) Senior Preferred Shares:
Series 1	924,390	5.25	%	23		23
Series 2	699,165	5.75	%	13		13
Series 3	909,814	5.00	%	18		17
Series 4	940,486	5.20	%	18		17
BSREP II RH B LLC (“Manufactured Housing”) Preferred Capital	—	9.00	%	249		249
Rouse Series A Preferred Shares	5,600,000	5.00	%	142		142
Forest City Enterprises L.P. Preferred Capital⁽³⁾	—	—	%	—		29
BSREP II Vintage Estate Partners LLC (“Vintage Estates”) Preferred Shares	10,000	5.00	%	40		40
Capital Securities – Fund Subsidiaries				922		813
Total capital securities				$	3,075	$	3,385

Current				$	75	$	520
Non-current				3,000		2,865
Total capital securities				$	3,075	$	3,385


⁽¹⁾	During the year ended December 31, 2019, approximately $420 million of the Brookfield BPY Holdings Inc. Class B Junior Preferred Shares, held by Brookfield Asset Management, were redeemed.


⁽²⁾	Class B, Series 1 and 2 capital securities - corporate are owned by Brookfield Asset Management. BPO has an offsetting loan receivable against these securities earning interest at 95% of bank prime.


⁽³⁾	Includes the impact of the deconsolidation of BSREP III investments, primarily Forest City. See Note 5, Investment Properties for further information.

The capital securities presented above represent interests in the partnership or its subsidiaries that are in legal form equity and are accounted for as liabilities in accordance with IFRS 9due to the redemption features of these instruments.

On December 4, 2014, the partnership issued $1,800 million of Preferred Equity Units to the Class A Preferred Unitholder. The Preferred Equity Units are exchangeable at the option of the Class A Preferred Unitholder into LP Units at a price of $25.70 per unit and were issued in three tranches of $600 million each, with an average dividend yield of 6.5% and maturities of seven, ten and twelve years. After three years for the seven-year tranche and four years for the ten- and twelve-year tranches, the partnership can effectively require the holder to exchange the Preferred Equity Units into LP Units as long as the LP Units are trading at or above 125%, 130% and 135%, respectively, of the exchange price. Upon maturity, the Preferred Equity Units that remain outstanding will be redeemed in exchange for LP Units valued at the 20-day, volume-weighted average trading price at such time. Brookfield Asset Management has contingently agreed to acquire the seven-year and ten-year tranches of Preferred Equity Units from the

Class A Preferred Unitholder for the initial issuance price plus accrued and unpaid distributions and to exchange such units for Preferred Equity Units with terms and conditions substantially similar to the twelve-year tranche to the extent that the market price of the LP Units is less than 80% of the exchange price at maturity. The Class A Preferred Unitholder has the right to designate one member to the board of directors of the partnership. The Preferred Equity Units have been accounted for as a compound instrument comprised of (i) a financial liability representing the partnership’s obligations to redeem the Preferred Equity Units at maturity for a variable number of BPY Units and (ii) an equity instrument representing the Class A Preferred Unitholder’s right to convert the Preferred Equity Units to a fixed number of BPY Units. The cash proceeds received from issuing the Preferred Equity Units were allocated between capital securities ($1,535 million) and limited partners’ equity ($265 million). The allocation between capital securities and equity was based on first determining the liability component by discounting the cash flows associated with these securities at market interest rates. The equity component was then assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component.

The holders of each series of the BOP Split Senior Preferred Shares are each entitled to receive fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors of BOP Split. Dividends on each series of the BOP Split Senior Preferred Shares are payable quarterly on the last day of March, June, September and December in each year.

Capital securities includes $249 million at December 31, 2019 (December 31, 2018 - $249 million) of preferred equity interests held by a third party investor in Manufactured Housing which have been classified as a liability, rather than as a non-controlling interest, due to the fact the holders are entitled to distributions equal to their capital balance plus 9% annual return payable in monthly distributions until maturity in December 2025.

Capital securities also includes $142 million at December 31, 2019 (December 31, 2018 - $142 million) of preferred equity interests held by a third party investor in Rouse Properties, L.P. (“Rouse”) which have been classified as a liability, rather than as a non-controlling interest, due to the fact that the interests are mandatorily redeemable on or after November 12, 2025 for a set price per unit plus any accrued but unpaid distributions; distributions are capped and accrue regardless of available cash generated.

Capital securities also includes $40 million at December 31, 2019 (December 31, 2018 - $40 million) of preferred equity interests held by the partnership’s co-investor in Vintage Estate which have been classified as a liability, rather than as non-controlling interest, due to the fact that the preferred equity interests are mandatorily redeemable on April 26, 2023 for cash at an amount equal to the outstanding principal balance of the preferred equity plus any accrued but unpaid dividend.

The Capital Securities - Fund Subsidiaries includes $859 million (December 31, 2018 - $775 million) of equity interests in Brookfield DTLA Holdings LLC (“DTLA”) held by co-investors in DTLA which have been classified as a liability, rather than as non-controlling interest, as holders of these interests can cause DTLA to redeem their interests in the fund for cash equivalent to the fair value of the interests on October 15, 2023, and on every fifth anniversary thereafter. Capital Securities – Fund Subsidiaries are measured at FVTPL.

Capital Securities - Fund Subsidiaries also includes $62 million at December 31, 2019 (December 31, 2018 - $38 million) which represents the equity interests held by the partnership’s co-investor in the D.C. Fund which have been classified as a liability, rather than as non-controlling interest, due to the fact that on June 18, 2023, and on every second anniversary thereafter, the holders of these interests can redeem their interests in the D.C. Fund for cash equivalent to the fair value of the interests.

Reconciliation of cash flows from financing activities from capital securities is shown in the table below:



						Non-cash changes on capital securities
(US$ Millions)	Dec. 31, 2018		Capital securities redeemed net of issued			Fair value changes		Derecognized from loss of control of subsidiaries			Foreign currency translation		Other		Dec. 31, 2019
Capital securities	$	3,385	$	(420	)	$	36	$	(29	)	$	2	$	101	$	3,075

Capital securities includes $49 million (December 31, 2018 - $47 million) repayable in Canadian Dollars of C$64 million (December 31, 2018 - C$64 million).

NOTE 18. INCOME TAXES

The partnership is a flow-through entity for tax purposes and as such is not subject to Bermudian taxation. However, income taxes are recognized for the amount of taxes payable by the primary holding subsidiaries of the partnership (“Holding Entities”), any direct or indirect corporate subsidiaries of the Holding Entities and for the impact of deferred tax assets and liabilities related to such entities.

The components of net deferred tax liability are presented as follows:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Deferred income tax assets:
Non-capital losses (Canada)	$	60		$	41
Capital losses (Canada)	33			34
Net operating losses (United States)	351			291
Non-capital losses (foreign)	107			94
Tax credit carryforwards	27			36
Foreign currency	10			4
Other	43			16
	631			516
Deferred income tax (liabilities):
Properties	(3,146		)	(2,894		)
	(3,146		)	(2,894		)
Net deferred tax (liability)	$	(2,515	)	$	(2,378	)

The changes in deferred tax balances are presented as follows:



				Recognized in
(US$ Millions)	Dec. 31, 2018			Income			Equity			Acquisitions and Dispositions			OCI			Other Balance Sheet			Dec. 31, 2019
Deferred tax assets	$	516		$	117		$	—		$	(7	)	$	5		$	—		$	631
Deferred tax (liabilities)	(2,894		)	(149		)	(7		)	—			(35		)	(61		)	(3,146		)
Net deferred tax (liability)	$	(2,378	)	$	(32	)	$	(7	)	$	(7	)	$	(30	)	$	(61	)	$	(2,515	)



				Recognized in
(US$ Millions)	Dec. 31, 2017			Income			Equity		Acquisitions and Dispositions			OCI			Other Balance Sheet		Dec. 31, 2018
Deferred tax assets	$	342		$	(23	)	$	—	$	208		$	(11	)	$	—	$	516
Deferred tax (liabilities)	(3,230		)	240			—		(32		)	128			—		(2,894		)
Net deferred tax (liability)	$	(2,888	)	$	217		$	—	$	176		$	117		$	—	$	(2,378	)

During 2019, the partnership and its subsidiaries deconsolidated certain investments in BSREP III investments. This resulted in the recognition of net deferred tax (liabilities) of $7 million. During 2019, the partnership and subsidiaries finalized purchase price allocations for certain business combinations. This resulted in a decrease of $7 million of net deferred tax assets being recognized. The partnership and its subsidiaries reclassified $61 million of certain tax credits from net deferred tax (liabilities) to other assets on the balance sheet.

During 2018, the partnership and its subsidiaries acquired additional ownership in Brookfield Global Real Estate Special Opportunities Inc. causing the partnership to consolidate the investment. This resulted in the recognition of net deferred tax assets of $200 million. During 2018, the purchase price allocations for certain business combinations were completed and an additional $25 million of net deferred tax (liabilities) were recognized.

The Holding Entities and their Canadian subsidiaries have deferred tax assets of $60 million (December 31, 2018 - $41 million) related to non-capital losses that will begin to expire in 2032, and $33 million (December 31, 2018 - $34 million) related to capital losses that have no expiry. The Holding Entities and their U.S. subsidiaries have deferred tax assets of $351 million (December 31, 2018 - $291 million) related to net operating losses that will begin to expire in 2027. The Holding Entities and their foreign subsidiaries, mainly in South Korea and India, have deferred tax assets of $107 million (December 31, 2018 - $94 million) related to non-capital losses which will begin to expire in 2020.

~~GGP INC.~~The gross deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax asset is recognized are as follows:

~~NOTES TO SCHEDULE III~~



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Unused tax losses - gross
Net operating losses (United States)	$	287	$	74
Net operating losses (foreign)	428		351
Unrecognized deductible temporary differences, unused tax losses, and unused tax credits	$	715	$	425

~~(Dollars~~The Holding Entities, their U.S. subsidiaries, and foreign subsidiaries have gross deductible temporary differences, unused tax losses, and unused tax credits which have not been recognized of $715 million (December 31, 2018 - $425 million) related to net operating losses. Approximately $83 million of the foreign net operating losses will expire by 2028. The remaining foreign net operating losses have no expiry. The majority of the U.S. net operating losses will begin to expire in ~~thousands)~~2035.

The aggregate amount of gross temporary differences associated with investments and interests in joint arrangements in subsidiaries for which deferred tax liabilities have not been recognized as of December 31, 2019 is approximately $11 billion (December 31, 2018 - $10 billion).

The major components of income tax expense include the following:



(US$ Millions) Years ended Dec. 31,	2019		2018			2017
Current income tax expense	$	164	$	299		$	172
Deferred income tax expense (benefit)	32		(218		)	20
Income tax expense	$	196	$	81		$	192

The increase in income tax expense for the year ended December 31, 2019 compared to the prior year primarily relates to the partnership recorded a significant deferred tax recovery in 2018 as a result of the acquisition of a controlling interest in GGP.



Years ended Dec. 31,	2019		2018		2017
Statutory income tax rate	26	%	26	%	26	%
Increase (decrease) in rate resulting from:
International operations subject to different tax rates	(14	)%	(10	)%	(5	)%
Non-controlling interests in income of flow-through entities	(4	)%	(11	)%	(12	)%
Change in tax rates applicable to temporary differences in other jurisdictions	(3	)%	(5	)%	(5	)%
Other	—	%	2	%	3	%
Effective income tax rate	5	%	2	%	7	%

As the partnership is not subject to tax, the analyses used the applicable Canadian blended Federal and Provincial tax rate as the statutory income tax rate.

~~Reconciliation~~NOTE 19. OTHER NON-CURRENT LIABILITIES

The components of ~~Real Estate~~other non-current liabilities are as follows:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Accounts payable and accrued liabilities	$	760	$	1,770
Lease liabilities⁽¹⁾	889		—
Derivative liability	413		159
Provisions	78		352
Loans and notes payables	18		5
Deferred revenue	4		8
Total other non-current liabilities	$	2,162	$	2,294


⁽¹⁾	The impact of the adoption of IFRS 16 requires the recognition of lease liabilities. See Note 2, Summary of Significant Accounting Policies for further information. For the year ended December 31, 2019, interest expense relating to total lease liabilities (see Note 20, Accounts Payable And Other Liabilities for the current portion) was $57 million.

NOTE 20. ACCOUNTS PAYABLE AND OTHER LIABILITIES

The components of accounts payable and other liabilities are as follows:

2017 2016 2015
(In thousands)
Balance at beginning of period $ 19,409,217
$ 20,285,046
$ 22,977,310
Additions 2,428,887
958,651
765,960
Impairments —
(130,619 ) —
Dispositions, transfers and write-offs (393,392 ) (1,703,861 ) (3,458,224 )
Balance at end of period $ 21,444,712
$ 19,409,217
$ 20,285,046



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Accounts payable and accrued liabilities	$	2,537	$	2,466
Loans and notes payables	172		779
Derivative liabilities	289		181
Deferred revenue	342		302
Lease liabilities	43		—
Other liabilities	43		21
Total accounts payable and other liabilities	$	3,426	$	3,749

~~Reconciliation~~Loans and notes payables includes nil at December 31, 2019 (December 31, 2018 - $733 million) of ~~Accumulated Depreciation~~on-demand deposits and promissory notes from Brookfield Asset Management to the partnership. See Note 36, Related Parties, for further information.

NOTE 21. EQUITY

The partnership’s capital structure is comprised of seven classes of partnership units: GP Units, LP Units, Redeemable/Exchangeable Partnership Units, Special LP Units, Exchange LP Units, FV LTIP units of the Operating Partnership and BPR Units. In addition, the partnership issued Class A Cumulative Redeemable Perpetual Preferred Units, Series 1 in the first quarter of 2019 and Class A Cumulative Redeemable Perpetual Preferred Units, Series 2 in the third quarter of 2019 (“Preferred Equity Units”).


a)	General and limited partnership units

GP Units entitle the holder to the right to govern the financial and operating policies of the partnership. The GP Units are entitled to a 1% general partnership interest.

LP Units entitle the holder to their proportionate share of distributions and are listed and publicly traded on the Nasdaq and the TSX. Each LP Unit entitles the holder thereof to one vote for the purposes of any approval at a meeting of limited partners, provided that holders of the Redeemable/Exchangeable Partnership Units that are exchanged for LP Units will only be entitled to a maximum number of votes in respect of the Redeemable/Exchangeable Partnership Units equal to 49% of the total voting power of all outstanding units.

The following table presents changes to the GP Units and LP Units from the beginning of the year:

2017 2016 2015
(In thousands)
Balance at beginning of period $ 2,737,286
$ 2,452,127
$ 2,280,845
Depreciation expense 644,148
620,540
607,192
Dispositions, transfers and write-offs (192,953 ) (335,381 ) (435,910 )
Balance at end of period $ 3,188,481
$ 2,737,286
$ 2,452,127



	GP Units			LP Units
(Thousands of units), Years ended Dec. 31,	2019	2018	2017	2019		2018		2017
Outstanding, beginning of year	139	139	139	424,198		254,989		260,222
Issued on August 28, 2018 for the acquisition of GGP	—	—	—	—		109,702		—
Exchange LP Units exchanged	—	—	—	425		7,770		285
BPR Units exchanged	—	—	—	36,316		56,166		—
Distribution reinvestment program	—	—	—	257		175		181
Issued under unit-based compensation plan	—	—	—	858		57		215
Repurchases of LP Units	—	—	—	(22,252	)	(4,661	)	(5,914	)
Outstanding, end of year	139	139	139	439,802		424,198		254,989


b)	Units of the operating partnership held by Brookfield Asset Management

Redeemable/Exchangeable Partnership Units

There were 432,649,105 Redeemable/Exchangeable Partnership Units outstanding at December 31, 2019, 2018 and 2017.

Special limited partnership units

Brookfield Property Special L.P. (“Special LP”) is entitled to receive equity enhancement distributions and incentive distributions from the operating partnership as a result of its ownership of the Special LP Units.

There were 4,759,997 Special LP Units outstanding at December 31, 2019, 2018 and 2017.


c)	Limited partnership units of Brookfield Office Properties Exchange LP

The Exchange LP Units are exchangeable at any time on a one-for-one basis, at the option of the holder, subject to their terms and applicable law, for LP Units. An Exchange LP Unit provides a holder thereof with economic terms that are substantially equivalent to those of a LP Unit. Subject to certain conditions and applicable law, Exchange LP will have the right, commencing June 9, 2021, to redeem all of the then outstanding Exchange LP Units at a price equal to the 20-day volume-weighted average trading price of an LP Unit plus all declared, payable, and unpaid distributions on such units.

The following table presents changes to the Exchange LP Units from the beginning of the year:



	Exchange LP Units
(Thousands of units)	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2017
Outstanding, beginning of year	3,308		11,078		11,363
Exchange LP Units exchanged⁽¹⁾	(425	)	(7,770	)	(285	)
Outstanding, end of year	2,883		3,308		11,078


⁽¹⁾	Exchange LP Units issued for the acquisition of incremental BPO common shares that have been exchanged are held by an indirect subsidiary of the partnership. Refer to the Consolidated Statements of Changes in Equity for the impact of such exchanges on the carrying value of Exchange LP Units.


d)	FV LTIP units of the Operating Partnership

The partnership issued units under the Brookfield Property L.P. FV LTIP Unit Plan (“FV LTIP Units”) to certain participants in 2019. Each FV LTIP unit will vest over a period of five years and is redeemable for LP Units, BPR Units or a cash payment subject to a conversion adjustment. There were 1,156,114 FV LTIP Units outstanding at December 31, 2019.


e)	Class A shares of Brookfield Property REIT Inc.

BPR Units were issued to former GGP common shareholders who elected to receive BPR Units as consideration. Each BPR Unit is structured to provide an economic return equivalent to an LP Unit. The holder of a BPR Unit has the right, at any time, to request the share be redeemed for cash equivalent to the value of an LP Unit. In the event the holder of a BPR Unit exercises this right, the partnership has the right, at its sole discretion, to satisfy the redemption request with an LP Unit rather than cash. As a result, BPR Units participate in earnings and distribution on a per unit basis equivalent to the per unit participation of LP Units. The partnership presents BPR Units as a component of non-controlling interest.

The following table presents changes to the BPR Units from the beginning of the year:



	Class A shares of Brookfield Property REIT Inc.
(Thousands of units)	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2017
Outstanding, beginning of year	106,090		—		—
Issued on August 28, 2018 for the acquisition of GGP	—		162,324		—
BPR Units exchanged⁽¹⁾	(36,316	)	(56,166	)	—
Repurchase of BPR Units	(5,724	)	—		—
Forfeitures	(25	)	(68	)	—
Outstanding, end of year	64,025		106,090		—


⁽¹⁾	Represents BPR Units that have been exchanged for LP Units. Refer to the Consolidated Statements of Changes in Equity for the impact of such exchanges on the carrying value of BPR Units.


f)	Class A Cumulative Redeemable Perpetual Preferred Units, Series 1 and 2 (“Preferred Equity Units”)

During the year ended December 31, 2019, the partnership issued 7,360,000 Class A Cumulative Redeemable Perpetual Preferred Units, Series 1 at $25.00 per unit at a coupon rate of 6.5% and 10,000,000 Class A Cumulative Redeemable Perpetual Preferred Units, Series 2 at $25.00 per unit at a coupon rate of 6.375%. In total $434 million of gross proceeds were raised and $14 million in underwriting and issuance costs were incurred. At December 31, 2019, Preferred Equity Units had a total carrying value of $420 million.


g)	Distributions

Distributions made to each class of partnership units, including units of subsidiaries that are exchangeable into LP Units, are as follows:



(US$ Millions, except per unit information) Years ended Dec. 31,	2019		2018		2017
Limited partners	$	573	$	410	$	301
Holders of:
Redeemable/exchangeable partnership units	574		545		510
Special LP Units	6		6		6
Exchange LP Units	4		9		13
FV LTIP of the Operating Partnership	1		—		—
BPR Units	108		89		—
Total distributions	$	1,266	$	1,059	$	830
Per unit⁽¹⁾	$	1.32	$	1.26	$	1.18


⁽¹⁾	Per unit outstanding on the record date for each.


h)	Earnings per Unit

The partnership’s net income per LP Unit and weighted average units outstanding are calculated as follows:



(US$ Millions) Years ended Dec. 31,	2019			2018		2017
Net income attributable to limited partners	$	884		$	764	$	136
Income reallocation related to mandatorily convertible preferred shares	80			98		22
Less: Preferred equity dividend	(15		)	—		—
Net income attributable to limited partners - basic	949			862		158
Dilutive effect of conversion of preferred shares and options⁽¹⁾	8			35		—
Net income attributable to limited partners - diluted	$	957		$	897	$	158

(Millions of units/shares)
Weighted average number of LP Units outstanding	431.3			307.7		256.0
Mandatorily convertible preferred shares	70.1			70.0		70.0
Weighted average number of LP Units outstanding - basic	501.4			377.7		326.0
Dilutive effect of conversion of preferred shares and options⁽¹⁾	6.7			18.5		1.2
Weighted average number of LP Units outstanding - diluted	508.1			396.2		327.2


⁽¹⁾	Theeffect of the conversion of preferred shares is anti-dilutive for the year ended December 31, 2017.

NOTE 22. NON-CONTROLLING INTERESTS

Non-controlling interests consists of the following:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Redeemable/Exchangeable Partnership Units and Special LP Units⁽¹⁾	$	13,200	$	12,740
Exchange LP Units⁽¹⁾	87		96
FV LTIP units of the Operating Partnership⁽¹⁾	35		—
BPR Units⁽¹⁾	1,930		3,091
Interest of others in operating subsidiaries and properties:
Preferred shares held by Brookfield Asset Management	15		16
Preferred equity of subsidiaries	3,017		2,830
Non-controlling interests in subsidiaries and properties	12,953		15,610
Total interests of others in operating subsidiaries and properties	15,985		18,456
Total non-controlling interests	$	31,237	$	34,383

⁽¹⁾

Each unit within these classes of non-controlling interest has economic terms substantially equivalent to those of an LP Unit. As such, income attributed to each unit or share of non-controlling interest is equivalent to that allocated to an LP Unit. The proportion of interests held by holders of the Redeemable/Exchangeable Units and Exchange LP Units changes as a result of issuances, repurchases and exchanges. Consequently, the partnership adjusted the relative carrying amounts of the interests held by limited partners and non-controlling interests based on their relative share of the equivalent LP Units. The difference between the adjusted value and the previous carrying amounts was attributed to current LP Units as ownership changes in the Consolidated Statements of Changes in Equity.

NOTE 23. COMMERCIAL PROPERTY REVENUE

The components of commercial property revenue are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Base rent⁽¹⁾	$	3,814	$	3,443	$	3,797
Straight-line rent	115		116		124
Lease termination	44		55		18
Other lease income⁽¹⁾⁽²⁾	612		623		—
Other revenue from tenants⁽¹⁾⁽³⁾	1,106		806		—
Other⁽¹⁾	—		—		253
Total commercial property revenue	$	5,691	$	5,043	$	4,192


⁽¹⁾	The partnership adopted IFRS 15 in 2018 using the modified retrospective method. The comparative information has not been restated and is reported under the accounting standards effective for those periods.


⁽²⁾	Other lease income includes parking revenue and recovery of property tax and insurance expense from tenants.


⁽³⁾	Consists of recovery of certain operating expenses and other revenue from tenants which are accounted for in accordance with IFRS 15.

The partnership leases properties under operating leases generally with lease terms of between 1 and 15 years, with options to extend. Minimum rental commitments under non-cancellable tenant operating leases are as follows:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Less than 1 year	$	3,191	$	3,282
1-5 years	11,030		11,679
More than 5 years	12,089		11,856
Total	$	26,310	$	26,817

NOTE 24. HOSPITALITY REVENUE

The components of hospitality revenue are as follows:



(US$ Millions)	2019		2018		2017
Room, food and beverage⁽¹⁾	$	1,431	$	1,373	$	1,648
Gaming, and other leisure activities⁽¹⁾	360		424		—
Other hospitality revenue⁽¹⁾	118		116		—
Total hospitality revenue	$	1,909	$	1,913	$	1,648


⁽¹⁾	The partnership adopted IFRS 15 in 2018 using the modified retrospective method. The comparative information has not been restated and is reported under the accounting standards effective for those periods.

NOTE 25. INVESTMENT AND OTHER REVENUE

The components of investment and other revenue are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Investment income	$	223	$	68	$	170
Fee revenue	259		131		61
Dividend income	6		10		18
Interest income and other	107		57		19
Participating loan interests	8		17		27
Total investment and other revenue	$	603	$	283	$	295

NOTE 26. DIRECT COMMERCIAL PROPERTY EXPENSE

The components of direct commercial property expense are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Property maintenance	$	749	$	773	$	709
Real estate taxes	619		528		472
Employee compensation and benefits	170		196		148
Ground rents⁽¹⁾	—		59		56
Lease expense⁽²⁾	16		—		—
Other	413		295		232
Total direct commercial property expense	$	1,967	$	1,851	$	1,617


⁽¹⁾	The partnership adopted IFRS 16 in 2019 using the modified retrospective method. The comparative information has not been restated and is reported under the accounting standards effective for those periods.


⁽²⁾	For the year ended December 31, 2019, operating expenses relating to variable lease payments not included in the measurement of the lease liability was $16 million.

NOTE 27. DIRECT HOSPITALITY EXPENSE

The components of direct hospitality expense are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Employee compensation and benefits	$	370	$	318	$	287
Cost of food, beverage, and retail goods sold	294		273		243
Maintenance and utilities	155		175		127
Marketing and advertising	71		75		55
Other	329		395		367
Total direct hospitality expense	$	1,219	$	1,236	$	1,079

NOTE 28. DEPRECIATION AND AMORTIZATION

The components of depreciation and amortization expense are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Depreciation and amortization of real estate assets	$	283	$	264	$	244
Depreciation and amortization of non-real estate assets⁽¹⁾	58		44		31
Total depreciation and amortization	$	341	$	308	$	275


⁽¹⁾	The partnership adopted IFRS 16 in 2019 using the modified retrospective method. The comparative information has not been restated and is reported under the accounting standards effective for those periods. For the year ended December 31, 2019, included $9 million of depreciation expense relating to right-of-use property, plant and equipment.

NOTE 29. GENERAL AND ADMINISTRATIVE EXPENSE

The components of general and administrative expense are as follows:



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Transaction costs	$	66	$	413	$	72
Employee compensation and benefits	366		247		199
Management fees	159		144		168
Other	291		228		175
Total general and administrative expense	$	882	$	1,032	$	614

NOTE 30. FAIR VALUE GAINS, NET

The components of fair value gains, net, are as follows:



(US$ Millions) Years ended Dec. 31,	2019			2018		2017
Commercial properties⁽¹⁾	$	301		$	784	$	347
Commercial developments	557			462		202
Incentive fees⁽²⁾	(104		)	—		—
Financial instruments and other⁽³⁾	(158		)	1,220		705
Total fair value gains, net	$	596		$	2,466	$	1,254


⁽¹⁾	For the year ended December 31, 2019, includes fair value loss on right-of-use investment properties of $5 million.


⁽²⁾	Represents incentive fees the partnership is obligated to pay to the general partner of the partnership’s various fund investments.


⁽³⁾	For the year ended December 31, 2019, primarily includes fair value losses on financial instruments of $147 million. The prior year primarily includes a gain on bargain purchase.

NOTE 31. UNIT-BASED COMPENSATION

The partnership grants options to certain employees under its amended and restated BPY Unit Option Plan (“BPY Plan”). Pursuant to the BPY Plan, options may be settled for the in-the-money amount of the option in LP Units upon exercise. Consequently, options granted to employees under the BPY Plan are accounted for as an equity-based compensation agreement.

During the year ended December 31, 2019, the partnership incurred $25 million (2018 - $12 million; 2017 - $14 million) of expense in connection with its unit-based compensation plans.


a)	BPY Unit Option Plan

Awards under the BPY Plan (“BPY Awards”) generally vest 20% per year over a period of five years and expire 10 years after the grant date, with the exercise price set at the time such options were granted and generally equal to the market price of an LP Unit on the Nasdaq on the last trading day preceding the grant date. Upon exercise of a vested BPY Award, the participant is entitled to receive BPY Units or a cash payment equal to the amount by which the fair market value of an LP Unit at the date of exercise exceeds the exercise price of the BPY Award. Subject to a separate adjustment arising from forfeitures, the estimated expense is revalued every reporting period using the Black-Scholes model as a result of the cash settlement provisions of the plan for employees whose location of employment is Australia or Canada. In terms of measuring expected life of the BPY Awards with various term lengths and vesting periods, BPY will segregate each set of similar BPY Awards and, if different, exercise price, into subgroups and apply a weighted average within each group.

There were no BPY Awards granted during the year ended December 31, 2019. The partnership estimated the fair value of the BPY Awards granted during the years ended December 31, 2018 and 2017 using the Black-Scholes valuation model. The following assumptions were utilized:



	Unit of measurement	Years ended Dec. 31,
	Unit of measurement	2019		2018		2017
Exercise price	US$	—		22.50		22.92
Average term to exercise	In years	—		7.50		7.50
Unit price volatility	%	—	%	23	%	25	%
Liquidity discount	%	—	%	25	%	25	%
Weighted average of expected annual dividend yield	%	—	%	6.50	%	6.50	%
Risk-free rate	%	—	%	2.82	%	2.37	%
Weighted average fair value per option	US$	—		0.74		1.60


i.	Equity-settled BPY Awards

The change in the number of options outstanding under the equity-settled BPY Awards for the years ended December 31, 2019, 2018 and 2017 is as follows:



	Dec. 31, 2019				Dec. 31, 2018				Dec. 31, 2017
Years ended Dec. 31,	Number of options		Weighted average exercise price		Number of options		Weighted average exercise price		Number of options		Weighted average exercise price
Outstanding, beginning of year	13,836,213		$	20.56	13,801,795		$	20.54	16,338,511		$	20.49
Granted	—		—		800,000		22.50		93,750		22.92
Exercised	(425,171	)	15.06		(36,806	)	17.71		(1,194,569	)	18.97
Expired/forfeited	(203,978	)	21.60		(291,625	)	22.18		(1,435,897	)	21.51
Reclassified⁽¹⁾	6,708,125		20.20		(437,151	)	22.48		—		—
Outstanding, end of year	19,915,189		$	20.58	13,836,213		$	20.56	13,801,795		$	20.54
Exercisable, end of year	11,484,219		$	20.56	9,628,246		$	20.26	7,352,112		$	20.22


⁽¹⁾	Relates to the reclassification of cash-settled options for employees in Canada to equity-settled options subsequent to the amendment of the BPY Plan, which was amended on September 30, 2019. The prior year relates to the reclassification of equity-settled options for employees in Brazil to cash-settled options subsequent to the amendment of the BPY Plan, which was amended on February 7, 2018.

The following table sets out details of options issued and outstanding at December 31, 2019, 2018 and 2017 under the equity-settled BPY Awards by expiry date:



	Dec. 31, 2019			Dec. 31, 2018			Dec. 31, 2017
Expiry date	Number of options	Weighted average exercise price		Number of options	Weighted average exercise price		Number of options	Weighted average exercise price
2020	—	—		226,800	13.07		226,800	13.07
2021	389,800	17.44		246,400	17.44		246,400	17.44
2022	987,700	18.09		508,300	18.07		517,300	18.07
2023	1,108,420	16.80		656,220	16.80		675,420	16.80
2024	11,794,215	20.59		7,878,998	20.59		7,946,313	20.59
2025	1,947,979	25.18		1,376,295	25.18		1,730,210	25.18
2026	2,793,325	19.51		2,049,450	19.51		2,365,602	19.51
2027	93,750	22.92		93,750	22.92		93,750	22.92
2028	800,000	22.50		800,000	22.50		—	—
Total	19,915,189	$	20.58	13,836,213	$	20.56	13,801,795	$	20.54


ii.	Cash-settled BPY Awards

The change in the number of options outstanding under the cash-settled BPY Awards for the years ended December 31, 2019, 2018 and 2017 is as follows:



	Dec. 31, 2019				Dec. 31, 2018				Dec. 31, 2017
Years ended Dec. 31,	Number of options		Weighted average exercise price		Number of options		Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding, beginning of year	7,331,416		$	20.38	7,144,871		$	20.30	$	7,377,042		$	20.28
Granted	—		—		—		—		—			—
Exercised	(19,400	)	12.63		(3,770	)	19.51		(213,106		)	19.12
Expired/forfeited	—		—		(246,836	)	21.87		(19,065		)	24.42
Reclassified⁽¹⁾	(6,708,125	)	20.20		437,151		22.48		—			—
Outstanding, end of year	603,891		$	21.55	7,331,416		$	20.38	7,144,871			$	20.30
Exercisable, end of year	505,092		$	21.48	5,627,610		$	20.17	3,973,290			$	19.93


⁽¹⁾	Relates to the reclassification of cash-settled options for employees in Canada to equity-settled options subsequent to the amendment of the BPY Plan, which was amended on September 30, 2019. The prior year relates to the reclassification of equity-settled options for employees in Brazil to cash-settled options subsequent to the amendment of the BPY Plan, which was amended on February 7, 2018.

The following table sets out details of options issued and outstanding at December 31, 2019, 2018 and 2017 under the cash-settled BPY Awards by expiry date:



	Dec. 31, 2019			Dec. 31, 2018			Dec. 31, 2017
Expiry date	Number of options	Weighted average exercise price		Number of options	Weighted average exercise price		Number of options	Weighted average exercise price
2020	—	—		69,000	13.07		69,000	13.07
2021	24,000	17.44		172,800	17.44		172,800	17.44
2022	22,200	17.93		515,800	18.09		515,800	18.09
2023	28,800	16.80		519,000	16.80		519,000	16.80
2024	175,416	20.59		4,278,663	20.59		4,330,286	20.59
2025	213,038	25.18		831,834	25.18		695,376	25.18
2026	140,437	19.51		944,319	19.51		842,609	19.51
Total	603,891	$	21.55	7,331,416	$	20.38	7,144,871	$	20.30


b)	Restricted BPY LP Unit Plan

The Brookfield Property Group Restricted BPY LP Unit Plan provides for awards to participants of LP Units purchased on the Nasdaq (“Restricted Units”). Under the Restricted BPY LP Unit Plan, units awarded generally vest over a period of five years, except as otherwise determined or for Restricted Units awarded in lieu of a cash bonus as elected by the participant, which may vest immediately. The estimated total compensation cost measured at grant date is evenly recognized over the vesting period of five years.

During 2019, the partnership granted 895,744 Restricted Units with a weighted average exercise price of $19.24.

As of December 31, 2019, the total number of Restricted Units outstanding was 797,674 (December 31, 2018 - 150,835) with a weighted average exercise price of $19.53 (December 31, 2018 - $20.97).


c)	Restricted BPY LP Unit Plan (Canada)

The Restricted BPY LP Unit Plan (Canada) is substantially similar to the Restricted BPY LP Unit Plan described above, except that it is for Canadian employees, there is a five year hold period, and purchases of units are made on the TSX instead of the Nasdaq.

As of December 31, 2019, the total number of Canadian Restricted Units outstanding was 393,980 (December 31, 2018 - 21,624) with a weighted average exercise price of C$25.59 (December 31, 2018 - C$22.88).


d)	Restricted BPR Unit Plan

The Brookfield Property Group Restricted BPR Class A Stock Plan provides for awards to participants of BPR Units purchased on the Nasdaq (“Restricted BPR Units”). Under the Restricted BPR Unit Plan, units awarded generally vest over a period of five years, except as otherwise determined or for Restricted BPR Units awarded in lieu of a cash bonus as elected by the participant, which may vest immediately. The estimated total compensation cost measured at grant date is evenly recognized over the vesting period of five years.

As of December 31, 2019, the total number of Restricted BPR Units outstanding was 357,313 with a weighted average exercise price of $19.22.


e)	BPY FV LTIP Unit Plan

The partnership issued units of the operating partnership pursuant to the Brookfield Property L.P. FV LTIP Unit Plan to certain participants. Each FV LTIP Unit will vest over a period of five years and is redeemable for LP Units, BPR Units or a cash payment subject to a conversion adjustment.

As of December 31, 2019, the total number of FV LTIP Units outstanding was 1,156,117 with a weighted average exercise price of $18.87 to employees.


f)	Deferred Share Unit Plan

In addition, BPO has a deferred share unit plan, the terms of which were amended to substitute LP Units for BPO common shares subject to such deferred shares. At December 31, 2019, BPO had 1,514,124 deferred share units (December 31, 2018 - 1,458,667) outstanding and vested.


g)	GGP LTIP Plans

In connection with the GGP acquisition, the partnership issued options under the Brookfield Property Partners BPY Unit Option Plan (GGP) (“GGP Options”) and Appreciation Only LTIP Units (“GGP AO LTIP”) to certain GGP employees. Each GGP Option will vest within ten years following the original grant date and is redeemable for LP Units or a cash payment equal to the amount by which the fair market value of an LP Unit at the date exceeds the exercise price of the BPY Option. Each GGP AO LTIP will vest within ten years of its original grant date and is redeemable for LP Units or a cash payment subject to a conversion adjustment.

As of December 31, 2019, the total number of GGP Options outstanding was 237,881 (December 31, 2018 - 1,011,523) with a weighted average exercise price of $25.39 (December 31, 2018 - $19.71).

As of December 31, 2019, the total number of GGP AO LTIP outstanding was 1,657,948 (December 31, 2018 - 1,387,289) with a weighted average exercise price of $22.51 (December 31, 2018 - $22.51).

NOTE 32. OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive (loss) income consists of the following:



(US$ Millions) Years ended Dec. 31,	2019			2018			2017
Items that may be reclassified to net income:
Foreign currency translation
Unrealized foreign currency translation gains (losses) in respect of foreign operations	$	207		$	(1,193	)	$	1,111
Reclassification of realized foreign currency translation gains to net income on disposition of foreign operations	26			19			118
(Losses) gains on hedges of net investments in foreign operations, net of income tax expense (benefit) of $2 million (2018 - $10 million; 2017 - ($18) million)	(176		)	386			(530		)
Reclassification of hedges of net investment in foreign operations (losses) to net income on disposition of foreign operations	6			—			(45		)
	63			(788		)	654
Cash flow hedges
Gains (losses) on derivatives designated as cash flow hedges, net of income tax expense (benefit) of $4 million (2018 - $25 million; 2017 - $18 million)	21			34			77
	21			34			77
Available-for-sale securities
Net change in unrealized (losses) gains on available-for-sale securities, net of income tax of nil (2018 - nil; 2017 - nil)	—			—			(5		)
	—			—			(5		)
Equity accounted investments
Share of unrealized foreign currency translations (losses) gains in respect of foreign operations	—			(9		)	5
Reclassification gains from hedges of net investment in foreign operation to net income on disposition of foreign operations	1			—			—
Share of gains (losses) on derivatives designated as cash flow hedges, net of income tax expense (benefit) of nil (2018 - nil; 2017 – $1 million)	(51		)	1			—
Share of unrealized gains (losses) on available-for-sale securities, net of income tax of nil (2018 - nil; 2017 - nil)	—			—			6
	(50		)	(8		)	11
Items that will not be reclassified to net income:
Unrealized gains (losses) on securities - FVTOCI, net of income tax benefit of $6 million (2018 - $2 million; 2017 - nil)	(7		)	(2		)	—
Share of revaluation surplus on equity accounted investments, net of income tax expense (benefit) of nil (2018 - ($5) million; 2017 - nil)	16			92			58
Net remeasurement gains (losses) on defined benefit plan, net of income tax expense of nil (2018 – nil; 2017 – nil)	(1		)	2			(1		)
Revaluation surplus, net of income tax expense of $22 million (2018 –$1 million; 2017 – $1 million)	281			254			86
	289			346			143
Total other comprehensive income (loss)	$	323		$	(416	)	$	880

NOTE 33. OBLIGATIONS, GUARANTEES, CONTINGENCIES AND OTHER

In the normal course of operations, the partnership and its consolidated entities execute agreements that provide for indemnification and guarantees to third parties in transactions such as business dispositions, business acquisitions, sales of assets and sales of services.

Certain of the partnership’s operating subsidiaries have also agreed to indemnify their directors and certain of their officers and employees. The nature of substantially all of the indemnification undertakings prevent the partnership from making a reasonable estimate of the maximum potential amount that it could be required to pay third parties as the agreements do not specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, neither the partnership nor its consolidated subsidiaries have made significant payments under such indemnification agreements.

The partnership and its operating subsidiaries may be contingently liable with respect to litigation and claims that arise from time to time in the normal course of business or otherwise.

At December 31, 2019, the partnership had commitments totaling:

approximately $2,240 million for the development of Manhattan West in Midtown New York, Greenpoint Landing in Brooklyn, as well as the redevelopment of One Allen Center, Two Allen Center, and Three Allen Center in Houston;

approximately A$301 million ($211 million) for the development of 388 George Street in Sydney; 405 Bourke Street in Melbourne; and Elizabeth Quay in Perth;

approximately £39 million ($52 million) for the development of 100 Bishopsgate and Principal Place Residential in London; and

approximately AED212 million ($58 million) for the development of ICD Brookfield Place in Dubai.

During 2013, Brookfield Asset Management announced the final close on the $4.4 billion first BSREP fund (“BSREP I”), a global private fund focused on making opportunistic investments in commercial property. The partnership, as lead investor, committed approximately $1.3 billion to the fund. As of December 31, 2019, there remained approximately $170 million of uncontributed capital commitments.

In April 2016, Brookfield Asset Management announced the final close on the $9.0 billion second BSREP fund (“BSREP II”) to which the partnership had committed $2.3 billion as lead investor. As of December 31, 2019, there remained approximately $755 million of uncontributed capital commitments.

In November 2017, Brookfield Asset Management announced the final close on the $2.9 billion fifth Brookfield Real Estate Finance Fund (“BREF”) to which the partnership had committed $400 million as lead investor. As of December 31, 2019, there remained approximately $235 million of uncontributed capital commitments.

In September 2018, Brookfield Asset Management announced the final close of the $1.0 billion third Brookfield Fairfield U.S. Multifamily Value Add Fund (“VAMF”) to which the partnership had committed $300 million. As of December 31, 2019, there remained approximately $180 million of uncontributed capital commitments.

In January 2019, Brookfield Asset Management announced the final close on the $15.0 billion third BSREP fund to which the partnership has committed $1.0 billion. As of December 31, 2019, there remained approximately $760 million of uncontributed capital commitments.

The partnership maintains insurance on its properties in amounts and with deductibles that it believes are in line with what owners of similar properties carry. The partnership maintains all risk property insurance and rental value coverage (including coverage for the perils of flood, earthquake and named windstorm). The partnership does not conduct its operations, other than those of equity accounted investments, through entities that are not fully or proportionately consolidated in these financial statements, and has not guaranteed or otherwise contractually committed to support any material financial obligations not reflected in these financial statements.

NOTE 34. LIQUIDITY AND CAPITAL MANAGEMENT

The capital of the partnership’s business consists of debt obligations, capital securities, preferred stock and equity. The partnership’s objective when managing this capital is to maintain an appropriate balance between holding a sufficient amount of equity capital to support its operations and reducing its weighted average cost of capital to improve its return on equity. As at December 31, 2019, capital totaled $103 billion (December 31, 2018 - $114 billion).

The partnership attempts to maintain a level of liquidity to ensure it is able to participate in investment opportunities as they arise and to better withstand sudden adverse changes in economic circumstances. The partnership’s primary sources of liquidity include cash, undrawn committed credit facilities, construction facilities, cash flow from operating activities and access to public and private capital markets. In addition, the partnership structures its affairs to facilitate monetization of longer-duration assets through financings and co-investor participations.

The partnership seeks to increase income from its existing properties by maintaining quality standards for its properties that promote high occupancy rates and support increases in rental rates while reducing tenant turnover and related costs, and by controlling operating expenses. Consequently, the partnership believes its revenue, along with proceeds from financing activities and divestitures, will continue to provide the necessary funds to cover its short-term liquidity needs. However, material changes in the factors described above may adversely affect the partnership’s net cash flows.

The partnership’s principal liquidity needs for the current year and for periods beyond include:

Recurring expenses;

Debt service requirements;

Distributions to unitholders;

Capital expenditures deemed mandatory, including tenant improvements;

Development costs not covered under construction loans;

Investing activities which could include:


◦	Fulfilling the partnership’s capital commitments to various funds;


◦	Discretionary capital expenditures;


◦	Property acquisitions;


◦	Future development; and


◦	Repurchase of the partnership’s units.

Most of the partnership’s borrowings are in the form of long-term asset-specific financings with recourse only to the specific assets. Limiting recourse to specific assets ensures that poor performance within one area does not compromise the partnership’s ability to finance the balance of its operations.

In addition, the partnership may, from time to time, issue equity instruments, including, but not limited to, LP Units, preferred equity and Redeemable/Exchangeable Partnership Units, to the public in private placements in certain circumstances to provide financing for significant transactions.

The partnership’s operating subsidiaries are subject to limited covenants in respect of their corporate debt and are in full compliance with all such covenants at December 31, 2019. The partnership’s operating subsidiaries are also in compliance with all covenants and other capital requirements related to regulatory or contractual obligations of material consequence to the partnership.

The partnership’s strategy is to satisfy its liquidity needs in respect of the partnership using the partnership’s cash on hand, cash flows generated from operating activities and provided by financing activities, as well as proceeds from asset sales, primarily held in the LP Investments segment. The operating subsidiaries of the partnership also generate liquidity by accessing capital markets on an opportunistic basis.

The partnership’s principal liquidity needs for periods beyond the next year are for scheduled debt maturities, distributions, recurring and non-recurring capital expenditures, development costs, potential property acquisitions and the partnership’s capital commitments to various funds. The partnership plans to meet these needs with one or more of: cash flows from operations; construction loans; creation of new funds; proceeds from sales of assets; proceeds from sale of non-controlling interests in subsidiaries and properties; and credit facilities and refinancing opportunities.

The table below presents the partnership’s contractual obligations as of December 31, 2019:



(US$ Millions)				Payments due by period
Dec. 31, 2019	Total			< 1 Year		1 Year		2 Years			3 Years			4 Years			> 5 Years
Debt obligations⁽¹⁾	$	55,390		$	8,829	$	9,315	$	5,605		$	6,011		$	10,781		$	14,849
Capital securities	3,075			75		1,536		141			1			547			775
Lease obligations	5,301			78		79		77			77			77			4,913
Commitments⁽²⁾	1,138			499		226		401			12			—			—

Interest expense⁽³⁾:
Long term debt	9,792			2,295		1,865		1,558			1,331			990			1,753
Capital securities	732			151		151		111			106			106			107
Interest rate swaps	(1		)	4		1		(3		)	(2		)	(1		)	—


⁽¹⁾	Debt obligations is net of deferred financing costs of $418 million.


⁽²⁾	Primarily consists of construction commitments on commercial developments.


⁽³⁾	Represents aggregate interest expense expected to be paid over the term of the obligations. Variable interest rate payments have been calculated based on current rates.

NOTE 35. FINANCIAL INSTRUMENTS


a)	Derivatives and hedging activities

The partnership and its operating entities use derivative and non-derivative instruments to manage financial risks, including interest rate, commodity, equity price and foreign exchange risks. The use of derivative contracts is governed by documented risk management policies and approved limits. The partnership does not use derivatives for speculative purposes. The partnership and its operating entities use the following derivative instruments to manage these risks:

foreign currency forward contracts to hedge exposures to Canadian Dollar, Australian Dollar, British Pound, Euro, Chinese Yuan, Brazilian Real, Indian Rupee and South Korean Won denominated net investments in foreign subsidiaries and foreign currency denominated financial assets;

interest rate swaps to manage interest rate risk associated with planned refinancings and existing variable rate debt;

interest rate caps to hedge interest rate risk on certain variable rate debt; and

cross currency swaps to manage interest rate and foreign currency exchange rates on existing variable rate debt.

The partnership also designates Canadian Dollar financial liabilities of certain of its operating entities as hedges of its net investments in its Canadian operations.

Interest Rate Hedging

The following table provides the partnership’s outstanding derivatives that are designated as cash flow hedges of variability in interest rates associated with forecasted fixed rate financings and existing variable rate debt as of December 31, 2019 and 2018:



(US$ Millions)	Hedging item	Notional		Rates	Maturity dates	Fair value
Dec. 31, 2019⁽¹⁾	Interest rate caps of US$ LIBOR debt	$	7,774	2.7% - 6.0%	May. 2020 - Sep. 2023	$	—
	Interest rate swaps of US$ LIBOR debt	2,877		1.4% - 2.7%	Feb. 2020 - Feb. 2024	(57		)
	Interest rate caps of £ LIBOR debt	3,096		2.0% - 2.5%	Jan. 2021 - Jan. 2022	—
	Interest rate swaps of £ LIBOR debt	74		1.5%	Apr. 2020	—
	Interest rate caps of € EURIBOR debt	109		1.3%	Apr. 2021	—
	Interest rate caps of C$ LIBOR debt	184		3.0%	Oct. 2020 - Oct. 2022	—
	Cross currency swaps of C$ LIBOR Debt	600		4.3% - 5.0%	Oct. 2021 - Mar. 2024	(95		)
Dec. 31, 2018	Interest rate caps of US$ LIBOR debt	$	8,180	2.3% - 6.0%	Jan. 2019 - Sep. 2023	$	2
	Interest rate swaps of US$ LIBOR debt	1,731		1.6% - 2.8%	Feb. 2020 - May 2024	(2		)
	Interest rate caps of £ LIBOR debt	486		2.0%	Apr. 2020 - Jan. 2021	—
	Interest rate swaps of £ LIBOR debt	67		1.5%	Apr. 2020	—
	Interest rate caps of € EURIBOR debt	115		1.0% - 1.3%	Apr. 2020 - Apr. 2021	—
	Interest rate caps of C$ LIBOR debt	176		3.0%	Oct. 2020 - Oct. 2022	—
	Interest rate swaps of C$ LIBOR debt	56		4.6%	Sep. 2023	—
	Interest rate swaps on forecasted fixed rate debt	100		4.0%	Jun. 2019	(114		)


⁽¹⁾	The IBOR Amendments disclosed in Note 2(m), Summary of Significant Accounting Policies - Financial instruments and hedge accounting, have been applied to all outstanding hedging items as of December 31, 2019

For the year ended December 31, 2019, the amount of hedge ineffectiveness recorded in earnings in connection with the partnership’s interest rate hedging activities totaled $22 million (December 31, 2018 - $37 million).

Foreign Currency Hedging

The following table presents the partnership’s outstanding derivatives that are designated as net investment hedges in foreign subsidiaries or cash flow hedges as of December 31, 2019 and 2018:



(US$ Millions)	Hedging item	Net Notional		Rates	Maturity dates	Fair value
Dec. 31, 2019	Net investment hedges	€	245	€0.85/$ - €0.91/$	Mar. 2020 - Jul. 2020	7
	Net investment hedges	£	2,444	£0.74/$ - £0.85/$	Jan. 2020 - Sep. 2021	(247		)
	Net investment hedges	A$	238	A$1.38/$ - A$1.48/$	Mar. 2020 - Mar. 2021	(5		)
	Net investment hedges	C¥	962	C¥6.75/$ - C¥7.16/$	Apr. 2020 - Jun. 2021	—
	Net investment hedges	C$	355	C$1.31/$ - C$1.33/$	Jun. 2020 - Sep. 2021	—
	Net investment hedges	R$	1,582	R$4.16/$ - R$4.16/$	Jun. 2020 - Jun. 2020	(10		)
	Net investment hedges	₩	720,095	₩1,149.50/$ - ₩1,174.30/$	Mar. 2020 - Mar. 2021	(7		)
	Net investment hedges	Rs	—	Rs71.78/$ - Rs73.01/$	Mar. 2020 - Apr. 2020	—
	Net investment hedges	£	77	£0.88/€ - £0.93/€	Jan. 2020 - Apr. 2021	—
	Cross currency swaps of C$ LIBOR debt	C$	800	C$1.29/$ - C$1.33/$	Oct. 2021 - Jul. 2023	(8		)
Dec. 31, 2018	Net investment hedges	€	649	€0.78/$ - €0.88/$	Jan. 2019 - May 2020	$	13
	Net investment hedges	£	3,175	£0.70/$ - £0.79/$	Feb. 2019 - Mar. 2020	104
	Net investment hedges	A$	1,038	A$1.28/$ - A$1.42/$	Jan. 2019 - Mar. 2020	20
	Net investment hedges	C¥	2,672	C¥6.35/$ - C¥6.91/$	Jan. 2019 - Nov. 2019	6
	Net investment hedges	C$	118	C$1.29/$ - C$1.34/$	Oct. 2019 - Nov 2019	4
	Net investment hedges	R$	158	R$3.90/$ - R$4.24/$	Jan. 2019 - Jun. 2019	(9		)
	Net investment hedges	₩	618,589	₩1,087.00/$ - ₩1,130.90/$	Jan. 2019 - Nov. 2019	1
	Net investment hedges	Rs	31,422	Rs67.44/$ - Rs70.39/$	Feb. 2019 - May 2019	3
	Net investment hedges	£	77	£0.88/€ - £0.92/€	Jan. 2019 - Feb. 2020	(1		)
	Cross currency swaps of C$ LIBOR debt	C$	800	C$1.29/$ - C$1.33/$	Oct. 2021 - Jul. 2023	(31		)

For the years ended December 31, 2019 and 2018, the amount of hedge ineffectiveness recorded in earnings in connection with the partnership’s foreign currency hedging activities was not significant.

Other Derivatives

The following tables provide detail of the partnership’s other derivatives, not designated as hedges for accounting purposes, that have been entered into to manage financial risks as of December 31, 2019 and 2018:



(US$ millions)	Derivative type	Notional		Rates	Maturity dates	Fair value
Dec. 31, 2019	Interest rate caps	$	5,663	2.5% - 5.0%	Mar. 2020 - Nov. 2021	$	—
	Interest rate swaps on forecasted fixed rate debt	1,285		1.1% - 6.4%	Jun. 2020 - Sep. 2031	(149		)
	Interest rate swaps of US$ debt	2,003		1.7% - 4.6%	Nov. 2020 - Sep. 2023	(14		)
Dec. 31, 2018	Interest rate caps	$	9,750	3.0% - 7.0%	Mar. 2019 - Jan. 2022	$	1
	Interest rate swaps on forecasted fixed rate debt	1,660		2.3% - 6.1%	Jun. 2019 - Nov. 2030	(67		)
	Interest rate swaps of US$ debt	835		2.4% - 5.8%	Jul. 2019 - Oct. 2039	(14		)
	Interest rate swaps on fixed rate debt	180		4.5% - 7.3%	Feb. 2019 - Jul. 2023	2

The partnership recognized fair value gains (losses), net of approximately $(70) million (December 31, 2018 - $29 million) related to the settlement of certain forward starting interest rate swaps that have not been designated as hedges.


b)	Measurement and classification of financial instruments

Fair value is the amount that willing parties would accept to exchange a financial instrument based on the current market for instruments with the same risk, principal and remaining maturity. The fair value of interest bearing financial assets and liabilities is determined by discounting the contractual principal and interest payments at estimated current market interest rates for the instrument. Current market rates are determined by reference to current benchmark rates for a similar term and current credit spreads for debt with similar terms and risk.

Classification and Measurement

The following table outlines the classification and measurement basis, and related fair value for disclosures, of the financial assets and liabilities in the consolidated financial statements:



		Dec. 31, 2019				Dec. 31, 2018
(US$ Millions)	Classification and measurement basis	Carrying value		Fair value		Carrying value		Fair value
Financial assets
Participating loan interests	FVTPL	$	—	$	—	$	268	$	268
Loans and notes receivable	Amortized cost	329		329		1,055		1,055
Other non-current assets
Securities - FVTPL	FVTPL	1,250		1,250		239		239
Derivative assets	FVTPL	10		10		13		13
Securities - FVTOCI	FVTOCI	121		121		260		260
Restricted cash	Amortized cost	154		154		161		161
Current assets
Derivative assets	FVTPL	80		80		234		234
Accounts receivable⁽¹⁾	Amortized cost	514		514		808		808
Restricted cash	Amortized cost	239		239		631		631
Cash and cash equivalents	Amortized cost	1,438		1,438		3,288		3,288
Total financial assets		$	4,135	$	4,135	$	6,957	$	6,957
Financial liabilities
Debt obligations⁽²⁾	Amortized cost	$	55,528	$	56,112	$	63,964	$	64,561
Capital securities	Amortized cost	2,153		2,160		2,572		2,578
Capital securities - fund subsidiaries	FVTPL	922		922		813		813
Other non-current liabilities
Loan payable	FVTPL	—		—		24		24
Accounts payable	Amortized cost	778		778		1,770		1,770
Derivative liabilities	FVTPL	413		413		159		159
Accounts payable and other liabilities
Accounts payable and other⁽³⁾	Amortized cost	2,711		2,711		3,255		3,255
Derivative liabilities	FVTPL	289		289		181		181
Total financial liabilities		$	62,794	$	63,385	$	72,738	$	73,341


⁽¹⁾	Includes other receivables associated with assets classified as held for sale on the consolidated balance sheets in the amounts of $4 million and $14 million as of December 31, 2019 and December 31, 2018, respectively.


⁽²⁾	Includes debt obligations associated with assets classified as held for sale on the consolidated balance sheets in the amount of $138 million and $153 million as of December 31, 2019 and December 31, 2018, respectively.


⁽³⁾	Includes accounts payable and other liabilities associated with assets classified as held for sale on the consolidated balance sheets in the amount of $2 million and $10 million as of December 31, 2019 and December 31, 2018, respectively.

The following table outlines financial assets and liabilities measured at fair value in the financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above:



	Dec. 31, 2019								Dec. 31, 2018
(US$ Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets
Participating loan interests	$	—	$	—	$	—	$	—	$	—	$	—	$	268	$	268
Securities designated as FVTPL	—		—		1,250		1,250		—		—		239		239
Securities designated as FVTOCI	—		—		121		121		—		—		260		260
Derivative assets	—		90		—		90		—		247		—		247
Total financial assets	$	—	$	90	$	1,371	$	1,461	$	—	$	247	$	767	$	1,014

Financial liabilities
Capital securities - fund subsidiaries	$	—	$	—	$	922	$	922	$	—	$	—	$	813	$	813
Derivative liabilities	—		702		—		702		—		340		—		340
Loan payable	—		—		—		—		—		—		24		24
Total financial liabilities	$	—	$	702	$	922	$	1,624	$	—	$	340	$	837	$	1,177

There were no transfers between levels during the years ended December 31, 2019 and 2018. The following table presents the valuation techniques and inputs of the partnership’s Level 2 assets and liabilities:



Type of asset/liability		Valuation technique
Foreign currency forward contracts		Discounted cash flow model - forward exchange rates (from observable forward exchange rates at the end of the reporting period) and discounted at a credit adjusted rate
Interest rate contracts		Discounted cash flow model - forward interest rates (from observable yield curves) and applicable credit spreads discounted at a credit adjusted rate

The table below presents the valuation techniques and inputs of Level 3 assets:



Type of asset/liability	Valuation techniques	Significant unobservable input(s)	Relationship of unobservable input(s) to fair value
Participating loan interests	Discounted cash flow model	(a) Discount rate (b) Terminal capitalization rate	(a) Decreases (increases) in the discount rate would increase (decrease) fair value (b) Increases (decreases) in the terminal capitalization rate would (decrease) increase fair value
Securities - FVTPL/FVTOCI	Net asset valuation	(a) Forward exchange rates (from observable forward exchange rates at the end of the reporting period) (b) Discount rate	(a) Increases (decreases) in the forward exchange rate would increase (decrease) fair value (b) Decreases (increases) in the discount rate would increase (decrease) fair value

The following table presents the change in the balance of financial assets and financial liabilities classified as Level 3 as of December 31, 2019 and 2018:



	Dec. 31, 2019					Dec. 31, 2018
(US$ Millions)	Financial assets			Financial liabilities		Financial assets			Financial liabilities
Balance, beginning of year	$	767		$	838	$	835		$	836
Additions	950			—		201			—
Dispositions	(125		)	—		(7		)	(2		)
Fair value gains, net and OCI	206			8		(14		)	4
Other	(427		)	76		(248		)	—
Balance, end of year	$	1,371		$	922	$	767		$	838


c)	Market Risk

Interest rate risk

The partnership faces interest rate risk on its variable rate financial assets and liabilities. In addition, there is interest rate risk associated with the partnership’s fixed rate debt due to the expected requirement to refinance such debt in the year of maturity. The following table outlines the impact on interest expense of a 100 basis point increase or decrease in interest rates on the partnership’s variable rate liabilities and fixed rate debt maturing within one year:



(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018
Variable rate property debt	$	250	$	382
Fixed rate property debt due within one year	7		5
Total	$	257	$	387

The partnership manages interest rate risk by primarily entering into fixed rate operating property debt and staggering the maturities of its mortgage portfolio over a 10-year horizon when the market permits. The partnership also makes use of interest rate derivatives to manage interest rate risk on specific variable rate debts and on anticipated refinancing of fixed rate debt.

Foreign currency risk

The partnership is structured such that its foreign operations are primarily conducted by entities with a functional currency which is the same as the economic environment in which the operations take place. As a result, the net income impact of currency risk associated with financial instruments is limited as its financial assets and liabilities are generally denominated in the functional currency of the subsidiary that holds the financial instrument. However, the partnership is exposed to foreign currency risk on the net assets of its foreign currency denominated operations.

The partnership’s exposures to foreign currencies and the sensitivity of net income and other comprehensive income, on a pre-tax basis, to a 10% change in the exchange rates relative to the U.S. dollar is summarized below:



	Dec. 31, 2019
(Millions)	Equity attributable to Unitholders		OCI			Net income
Canadian Dollar⁽¹⁾	C$	377	$	(29	)	$	—
Australian Dollar	A$	2,154	(151		)	—
British Pound	£	3,275	(434		)	—
Euro	€	339	(38		)	—
Brazilian Real	R$	3,310	(82		)	—
Indian Rupee	Rs	26,628	(37		)	—
Chinese Yuan	C¥	933	(13		)	—
South Korean Won	₩	160,969	(14		)	—
United Arab Emirates Dirham	AED	683	(19		)	—
Czech Koruna	CZK	10	—			—
Hungarian Forint	HUF	314	—			—
Poland Zloty	PLN	3	—			—
Total			$	(817	)	$	—


⁽¹⁾	Net of Canadian Dollar denominated loans.



	Dec. 31, 2018
(Millions)	Equity attributable to Unitholders			OCI			Net income
Canadian Dollar⁽¹⁾	C$	58		$	(4	)	$	—
Australian Dollar	A$	2,977		(210		)	—
British Pound	£	3,965		(506		)	—
Euro	€	505		(58		)	—
Brazilian Real	R$	2,823		(73		)	—
Indian Rupee	Rs	25,022		(36		)	—
Hong Kong Dollar	HK$	(75	)	1			—
Chinese Yuan	C¥	1,593		(23		)	—
South Korean Won	₩	245,507		(22		)	—
United Arab Emirates Dirham	AED	451		(12		)	—
Total				$	(943	)	$	—


⁽¹⁾	Net of Canadian Dollar denominated loans.



	Dec. 31, 2017
(Millions)	Equity attributable to Unitholders			OCI			Net income
Canadian Dollar⁽¹⁾	C$	4		$	—		$	—
Australian Dollar	A$	2,679		(209		)	—
British Pound	£	3,719		(503		)	—
Euro	€	213		(26		)	—
Brazilian Real	R$	2,591		(78		)	—
Indian Rupee	Rs	15,904		(25		)	—
Hong Kong Dollar	HK$	(75	)	1			—
Chinese Yuan	C¥	1,207		(19		)	—
South Korean Won	₩	232,345		(22		)	—
United Arab Emirates Dirham	AED	451		(12		)	—
Total				$	(893	)	$	—


⁽¹⁾	Net of Canadian Dollar denominated loans.


d)	Credit risk

The partnership’s maximum exposure to credit risk associated with financial assets is equivalent to the carrying value of each class of financial asset as separately presented in loans and notes receivable, certain other non-current assets, accounts receivables and other, and cash and cash equivalents.

Credit risk arises on loans and notes receivables in the event that borrowers default on the repayment to the partnership. The partnership mitigates this risk by attempting to ensure that adequate security has been provided in support of such loans and notes.

Credit risk related to accounts receivable arises from the possibility that tenants may be unable to fulfill their lease commitments. The partnership mitigates this risk through diversification, ensuring that tenants meet minimum credit quality requirements and by ensuring that its tenant mix is diversified and by limiting its exposure to any one tenant. The partnership maintains a portfolio that is diversified by property type so that exposure to a business sector is lessened.

Currently no one tenant represents more than 10% of operating property revenue.

The majority of the partnership’s trade receivables are collected within 30 days. The balance of accounts receivable and loans and notes receivable past due is not significant.

NOTE 36. RELATED PARTIES

In the normal course of operations, the partnership enters into transactions with related parties. These transactions are recognized in the consolidated financial statements. These transactions have been measured at exchange value and are recognized in the consolidated financial statements. The immediate parent of the partnership is the BPY General Partner. The ultimate parent of the partnership is Brookfield Asset Management. Other related parties of the partnership include the partnership’s and Brookfield Asset Management’s subsidiaries and operating entities, certain joint ventures and associates accounted for under the equity method, as well as officers of such entities and their spouses.

The partnership has a management agreement with its service providers, wholly-owned subsidiaries of Brookfield Asset Management. Pursuant to a Master Services Agreement, the partnership pays a base management fee (“base management fee”), to the service providers equal to 0.5% of the total capitalization of the partnership, subject to an annual minimum of $50 million, plus annual inflation adjustments. The calculation of the equity enhancement distribution is reduced by the amount by which the base management fee is greater than $50 million per annum, plus annual inflation adjustments, to maintain a fee level in aggregate that would be the same as prior to the amendment. In connection with the GGP acquisition, the Master Services Agreement was amended so that the base management fee took into account any management fee payable by BPR under its master services agreement with Brookfield Asset Management and certain of its subsidiaries.

The base management fee for the year ended December 31, 2019 was $107 million (2018 - $83 million, 2017 - $104 million). The equity enhancement distribution for the year ended December 31, 2019 was $26 million (2018 - $1 million, 2017 - $26 million).

In connection with the issuance of Preferred Equity Units to the Class A Preferred Unitholder in 2014, Brookfield Asset Management contingently agreed to acquire the seven-year and ten-year tranches of Preferred Equity Units from the Class A Preferred Unitholder for the initial issuance price plus accrued and unpaid distributions and to exchange such units for Preferred Equity Units with terms and conditions substantially similar to the twelve-year tranche to the extent that the market price of the LP Units is less than 80% of the exchange price at maturity.

The following table summarizes transactions and balances with related parties:



(US$ Millions)	Dec. 31, 2019			Dec. 31, 2018
Balances outstanding with related parties:
Participating loan interests	$	—		$	268
Net (payables)/receivables within equity accounted investments	(81		)	(26		)
Loans and notes receivable⁽¹⁾	102			54
Receivables and other assets	17			50
Deposit and promissory note from Brookfield Asset Management⁽²⁾	—			(733		)
Property-specific obligations⁽³⁾	—			(231		)
Loans and notes payable and other liabilities	(196		)	(50		)
Capital securities held by Brookfield Asset Management⁽⁴⁾	—			(420		)
Preferred shares held by Brookfield Asset Management	(15		)	(15		)


⁽¹⁾	At December 31, 2019, includes nil(December 31, 2018 - $54 million) receivable from Brookfield Asset Management upon the earlier of the partnership’s exercise of its option to convert its participating loan interests into direct ownership of the Australian portfolio or the maturity of the participating loan interests.


⁽²⁾	The deposit and promissory note from Brookfield Asset Management were repaid during the year ended December 31, 2019.


⁽³⁾	The partnership exercised its option to acquire properties in Australia from Brookfield Asset Management during the year, therefore the property-specific obligations are now consolidated.


⁽⁴⁾	In 2019, approximately $420 million of the Brookfield BPY Holdings Inc. Class B Junior Preferred Shares, held by Brookfield Asset Management, were redeemed.



(US$ Millions) Years ended Dec. 31,	2019		2018		2017
Transactions with related parties:
Commercial property revenue⁽¹⁾	$	26	$	22	$	19
Management fee income	35		5		6
Participating loan interests (including fair value gains, net)⁽²⁾	50		53		86
Interest expense on debt obligations	48		44		29
Interest on capital securities held by Brookfield Asset Management	8		64		83
General and administrative expense⁽²⁾	198		192		204
Construction costs⁽³⁾	411		397		295
Incentive Fees⁽⁴⁾	104		—		—


⁽¹⁾	Amounts received from Brookfield Asset Management and its subsidiaries for the rental of office premises.


⁽²⁾	Includes amounts paid to Brookfield Asset Management and its subsidiaries for management fees, management fees associated with the partnership’s investments in Brookfield-sponsored real estate funds, and administrative services.


⁽³⁾	Includes amounts paid to Brookfield Asset Management and its subsidiaries for construction costs of development properties.


⁽⁴⁾	Represents incentive fees the partnership is obligated to pay to the general partner of the partnership’s various fund investments.

During the fourth quarter of 2019, the partnership converted its economic interest, through its participating loan agreements, in a portfolio of properties in Australia owned by Brookfield Asset Management into direct ownership interests

During the third and fourth quarters of 2019, the partnership sold partial interest in two multifamily developments in Brooklyn, NY and a retail development in Connecticut into the Brookfield Opportunity Zone fund (“BOZ fund”). Upon the final close of BOZ fund in the fourth quarter of 2019, the partnership’s interests in these development assets were diluted, which resulted in the deconsolidation of the assets and accounting for them as a financial asset.

During the first quarter of 2018, the partnership along with BPREP acquired a 25% and 75% interest, respectively, in 333 West 34th Street, an office building in New York for $255 million.

During the third quarter of 2018, the partnership sold 27.5% of its interest in a portfolio of operating and development assets in New York. The partnership retains control over and continues to consolidate these assets after the sale. The interest was sold to Brookfield Asset Management for consideration of approximately $1.4 billion.

During the fourth quarter of 2018, the partnership launched Brookfield Premier Real Estate Partners Pooling LLC Australia (“BPREP Australia”), an open-ended fund. The partnership contributed interests in Jessie Street, 52 Goulburn Street and 680 George Street in Sydney and 235 St Georges Terrace in Perth to BPREP Australia. The partnership’s interest in BPREP Australia is 39%, with the remaining interest of 61% held by external investors. The partnership continues to consolidate the properties contributed to BPREP Australia, except for 680 George Street, which it continues to account for under the equity method.

NOTE 37. SUBSIDIARY PUBLIC ISSUERS

BOP Split was incorporated for the purpose of being an issuer of preferred shares and owning a portion of the partnership’s investment in BPO common shares. Pursuant to the terms of a Plan of Arrangement, holders of outstanding BPO Class AAA Preferred Shares Series G, H, J and K, which were convertible into BPO common shares, were able to exchange their shares for BOP Split Senior Preferred Shares, subject to certain conditions. The BOP Split Senior Preferred shares are listed on the TSX and began trading on June 11, 2014. All shares issued by BOP Split are retractable by the holders at any time for cash.

In connection with an internal restructuring completed in July 2016, the partnership and certain of its related entities agreed to guarantee all of BPO’s Class AAA Preferred Shares and all of BPO’s debt securities issued pursuant to BPO’s indenture dated December 8, 2009.

In April 2018, the partnership formed two subsidiaries, Brookfield Property Finance ULC and Brookfield Property Preferred Equity Inc. to act as issuers of debt and preferred securities, respectively. The partnership and certain of its related entities have agreed to guarantee securities issued by these entities.

The following table provides consolidated summary financial information for the partnership, BOP Split, BPO, Brookfield Property Finance ULC, Brookfield Property Preferred Equity Inc. and the holding entities:



(US$ Millions)	Brookfield Property Partners L.P.		BOP Split Corp.			BPO			Brookfield Property Preferred Equity Inc.		Brookfield Property Finance ULC			Holding Entities⁽²⁾		Additional holding entities and eliminations⁽³⁾			Consolidating Adjustments⁽⁴⁾			Brookfield Property Partners L.P. consolidated
Year ended December 31, 2019
Revenue	$	—	$	32		$	163		$	—	$	43		$	1,767	$	392		$	5,806		$	8,203
Net income attributable to unitholders⁽¹⁾	967		386			767			—		(41		)	1,956		688			(2,767		)	1,956

Year ended December 31, 2018
Revenue	$	—	$	27		$	166		$	—	$	8		$	1,192	$	167		$	5,679		$	7,239
Net income attributable to unitholders⁽¹⁾	767		417			(1,419		)	—		—			1,978		(34		)	269			1,978

Year ended December 31, 2017
Revenue	$	—	$	—		$	197		$	—	$	—		$	1,518	$	—		$	4,420		$	6,135
Net income attributable to unitholders⁽¹⁾	138		(409		)	(763		)	—		—			375		17			1,017			375


⁽¹⁾	Includes net income attributable to LP Units, GP Units, Redeemable/Exchangeable Partnership Units, Special LP Units, Exchange LP Units and BPR Units.


⁽²⁾	Includes the operating partnership, Brookfield BPY Holdings Inc., Brookfield BPY Retail Holdings II Inc., BPY Bermuda Holdings Limited, and BPY Bermuda Holdings II Limited.


⁽³⁾	Includes BPY Bermuda Holdings IV Limited, BPY Bermuda Holdings V Limited and BPY Bermuda Holdings VI Limited, which serve as guarantors for BPO but not BOP Split, net of intercompany balances and transactions with other holding entities


⁽⁴⁾	Includes elimination of intercompany transactions and balances necessary to present the partnership on a consolidated basis.



(US$ Millions)	Brookfield Property Partners L.P.		BOP Split Corp.		BPO		Brookfield Property Preferred Equity Inc.		Brookfield Property Finance ULC		Holding Entities⁽²⁾		Additional holding entities and eliminations⁽³⁾		Consolidating Adjustments⁽⁴⁾			Brookfield Property Partners L.P. consolidated
As of Dec. 31, 2019
Current assets	$	—	$	12	$	127	$	—	$	673	$	8,436	$	176	$	(6,522	)	$	2,902
Non-current assets	14,517		11,739		23,830		—		429		29,367		2,049		26,423			108,354
Assets held for sale	—		—		—		—		—		—		—		387			387
Current liabilities	—		995		131		—		15		5,981		1,129		4,075			12,326
Non-current liabilities	—		6,173		6,744		—		1,078		2,871		519		36,857			54,242
Liabilities associated with assets held for sale	—		—		—		—		—		—		—		140			140
Preferred equity	420		—		—		—		—		—		—		—			420
Equity attributable to interests of others in operating subsidiaries and properties	—		—		2,284		—		—		—		—		13,701			15,985
Equity attributable to unitholders⁽¹⁾	$	14,097	$	4,583	$	14,798	$	—	$	9	$	28,951	$	577	$	(34,485	)	$	28,530

As of Dec. 31, 2018
Current assets	$	—	$	52	$	151	$	—	$	596	$	6,144	$	330	$	(1,163	)	$	6,110
Non-current assets	13,273		11,748		20,359		—		—		30,277		1,775		37,974			115,406
Assets held for sale	—		—		—		—		—		—		—		1,004			1,004
Current liabilities	—		2,806		678		—		593		5,731		1,834		(1,499		)	10,143
Non-current liabilities	—		3,053		4,738		—		—		2,406		5		55,272			65,474
Liabilities associated with assets held for sale	—		—		—		—		—		—		—		163			163
Equity attributable to interests of others in operating subsidiaries and properties	—		—		2,284		—		—		—		—		16,172			18,456
Equity attributable to unitholders⁽¹⁾	$	13,273	$	5,941	$	12,810	$	—	$	3	$	28,284	$	266	$	(32,293	)	$	28,284


⁽¹⁾	Includes net income attributable to LP Units, GP Units, Redeemable/Exchangeable Partnership Units, Special LP Units, Exchange LP Units and BPR Units.


⁽²⁾	Includes the operating partnership, Brookfield BPY Holdings Inc., Brookfield BPY Retail Holdings II Inc., BPY Bermuda Holdings Limited, and BPY Bermuda Holdings II Limited.


⁽³⁾	Includes BPY Bermuda Holdings IV Limited, BPY Bermuda Holdings V Limited and BPY Bermuda Holdings VI Limited, which serve as guarantors for BPO but not BOP Split, net of intercompany balances and transactions with other holding entities


⁽⁴⁾	Includes elimination of intercompany transactions and balances necessary to present the partnership on a consolidated basis.

NOTE 38. PAYROLL EXPENSE

The partnership has no employees or directors; therefore the partnership does not remunerate key management personnel. Key decision makers of the partnership are all employees of Brookfield Asset Management, the ultimate parent company, who provide management services under the Master Services Agreement.

Throughout the year, the partnership’s general partner incurs director fees, a portion of which are charged to the partnership in accordance with the limited partnership agreement.

NOTE 39. SEGMENT INFORMATION


a)	Operating segments

IFRS 8, Operating Segments, requires operating segments to be determined based on internal reports that are regularly reviewed by the chief operating decision maker (“CODM”) for the purpose of allocating resources to the segment and to assessing its performance. On July 1, 2018, the partnership realigned its LP Investments segment (formerly referred to as Opportunistic) to include the corporate function of the Brookfield-sponsored real estate opportunity funds, previously included in the Corporate segment, to more closely align with how the partnership now presents financial information to the CODM and investors. All prior period segment disclosures have been recast to reflect the changes in the partnership’s operating segments. The partnership’s operating segments are organized into four reportable segments: i) Core Office, ii) Core Retail, iii) LP Investments and iv) Corporate. These segments are independently and regularly reviewed and managed by the Chief Executive Officer, who is considered the CODM.


b)	Basis of measurement

The CODM measures and evaluates the performance of the partnership’s operating segments based on funds from operations (“FFO”). This performance metric does not have standardized meanings prescribed by IFRS and therefore may differ from similar metrics used by other companies and organizations. Management believes that while not an IFRS measure, FFO is the most consistent metric to measure the partnership’s financial statements and for the purpose of allocating resources and assessing its performance.

The partnership defines FFO as net income, prior to fair value gains, net, depreciation and amortization of real estate assets, and income taxes less non-controlling interests of others in operating subsidiaries and properties share of these items. When determining FFO, the partnership also includes its proportionate share of the FFO of unconsolidated partnerships and joint ventures and associates.


b)	Reportable segment measures

The following summaries present certain financial information regarding the partnership’s operating segments for the year ended December 31, 2019, 2018, and 2017.



(US$ Millions)	Total revenue						FFO
Years ended Dec. 31,	2019		2018		2017		2019			2018			2017
Core Office	$	2,149	$	2,105	$	2,147	$	582		$	520		$	534
Core Retail⁽¹⁾	1,589		584		—		707			552			486
LP Investments	4,452		4,544		3,987		268			228			281
Corporate	13		6		1		(410		)	(434		)	(428		)
Total	$	8,203	$	7,239	$	6,135	$	1,147		$	866		$	873


⁽¹⁾	Represents revenue from Core Retail subsequent to the acquisition of GGP on August 28, 2018, when the partnership started consolidating Core Retail’s results. See Note 4, Acquisition of GGP Inc. for further information. The prior periods presented represent the partnership’s equity accounted interest in GGP prior to the acquisition, 34% as of December 31, 2017.

The following summary presents the detail of total revenue from the partnership’s operating segments for the year ended December 31, 2019 and 2018:



(US$ Millions)	Lease revenue		Other revenue from tenants		Hospitality revenue		Investment and other revenue		Total revenue
Year ended Dec. 31, 2019	Lease revenue		Other revenue from tenants		Hospitality revenue		Investment and other revenue		Total revenue
Core Office	$	1,426	$	477	$	12	$	234	$	2,149
Core Retail	1,082		312		—		195		1,589
LP Investments	2,077		317		1,897		161		4,452
Corporate	—		—		—		13		13
Total	$	4,585	$	1,106	$	1,909	$	603	$	8,203



(US$ Millions)	Lease revenue		Other revenue from tenants		Hospitality revenue		Investment and other revenue		Total revenue
Year ended Dec. 31, 2018	Lease revenue		Other revenue from tenants		Hospitality revenue		Investment and other revenue		Total revenue
Core Office	$	1,604	$	358	$	17	$	126	$	2,105
Core Retail	400		111		—		73		584
LP Investments	2,233		337		1,896		78		4,544
Corporate	—		—		—		6		6
Total	$	4,237	$	806	$	1,913	$	283	$	7,239

The following summary presents information about certain consolidated balance sheet items of the partnership, on a segmented basis, as of December 31, 2019 and 2018:



	Total assets				Total liabilities
(US$ Millions)	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2018
Core Office	$	36,758	$	34,095	$	17,592	$	15,033
Core Retail	32,921		29,658		16,996		13,749
LP Investments	41,838		58,610		27,457		41,604
Corporate	126		157		4,663		5,394
Total	$	111,643	$	122,520	$	66,708	$	75,780

The following summary presents a reconciliation of FFO to net income for the years ended December 31, 2019, 2018, and 2017:



(US$ Millions) Years ended Dec. 31,	2019			2018			2017
FFO⁽¹⁾	$	1,147		$	866		$	873
Depreciation and amortization of real estate assets	(283		)	(264		)	(244		)
Fair value gains, net	596			2,466			1,254
Share of equity accounted income - non-FFO	1,055			114			82
Income tax benefit (expense)	(196		)	(81		)	(192		)
Non-controlling interests of others in operating subsidiaries and properties - non-FFO	(363		)	(1,123		)	(1,398		)
Net income attributable to unitholders⁽²⁾	1,956			1,978			375
Non-controlling interests of others in operating subsidiaries and properties	1,201			1,676			2,093
Net income	$	3,157		$	3,654		$	2,468


⁽¹⁾	FFO represents interests attributable to GP Units, LP Units, Exchange LP Units, Redeemable/Exchangeable Partnership Units, Special LP Units, FV LTIP Units and BPR Units. The interests attributable to Exchange LP Units, Redeemable/Exchangeable Units, Special LP Units, FV LTIP Units and BPR Units are presented as non-controlling interests in the consolidated statements of income.


⁽²⁾	Includes net income attributable to general partner, limited partners, Exchange LP Units, Redeemable/Exchangeable Partnership Units, Special LP Units, FV LTIP Units and BPR Units. The interests attributable to Exchange LP Units, Redeemable/Exchangeable Units, Special LP Units, FV LTIP Units and BPR Units are presented as non-controlling interests in the consolidated statements of income.

The following summary presents financial information by the partnership’s geographic regions in which it operates:



	Total revenue for the years ended Dec. 31,						Total non-current assets as at Dec. 31,
(US$ Millions)	2019		2018		2017		2019		2018
United States	$	5,926	$	4,914	$	4,127	$	75,118	$	84,648
Canada	536		563		462		5,157		4,535
Australia	210		240		227		3,316		3,631
Europe	901		944		829		15,412		14,051
Brazil	117		113		134		2,121		1,901
China	6		7		1		94		389
India	288		247		161		3,880		3,142
South Korea	219		211		194		3,089		2,986
United Arab Emirates	—		—		—		167		123
Total	$	8,203	$	7,239	$	6,135	$	108,354	$	115,406

NOTE 40. SUBSEQUENT EVENTS

On January 15, 2020, the partnership issued medium term notes for C$400 million at 3.93% per annum, with a term of seven years. Interest on the notes are payable semi-annually.

On January 15, 2020, the partnership additionally issued medium term notes for C$100 million at 4.346% per annum, at an implied yield of 3.02%, with a term of 3.5 years. Interest on the notes are payable semi-annually.

On February 4, 2020, the board of directors declared a quarterly distribution on the partnership’s LP Units of $0.3325 per unit ($1.33 on an annualized basis) payable on March 31, 2020 to unitholders of record at the close of business on February 28, 2020.

On February 18, 2020, the partnership issued $287.5 million of our Class A Cumulative Redeemable Perpetual Preferred Units, Series 3 at a coupon rate of 5.75% per annum, payable quarterly in arrears.

SCHEDULE III – SUPPLEMENTAL SCHEDULE OF INVESTMENT PROPERTY INFORMATION

The table below presents the partnership’s number of commercial properties, the related fair value, debt obligations, weighted average year of acquisition and weighted average year of construction by asset class as of December 31, 2019.



	Dec. 31, 2019
	Number of properties	Fair value⁽¹⁾		Debt⁽²⁾		Weighted average year of acquisition	Weighted average year of construction⁽³⁾
(US$ millions, except where noted)	Number of properties	Fair value⁽¹⁾		Debt⁽²⁾		Weighted average year of acquisition	Weighted average year of construction⁽³⁾
Core Office
United States	35	$	14,889	$	8,286	2004	1985
Canada	24	4,552		2,079		2002	1993
Australia	8	1,881		1,273		2011	2008
Europe	3	910		1,883		2019	2016
Brazil	2	361		74		2014	2014
	72	22,593		13,595		2005	1990
Core Retail	62	21,530		10,305		2018	1975
Opportunistic Office	112	8,051		4,928		2016	1994
Opportunistic Retail	36	2,812		1,565		2015	1980
Logistics	1	84		46		2018	2018
Multifamily	49	2,853		2,146		2016	1996
Triple Net Lease⁽⁴⁾	260	4,357		3,171		2015	1992
Self-storage	100	991		676		2017	2002
Student Housing	50	2,445		1,567		2017	2012
Manufactured Housing	136	2,446		1,218		2017	1974
Mixed-Use⁽¹⁾	7	2,612		1,823		2016	2010
Total	885	70,774		41,040		2013	1987


⁽¹⁾	Excludes development properties and land/parking lots with a fair value of $3,986 million.


⁽²⁾	Excludes debt related to development properties and land in the amount of $338 million, unsecured and corporate facilities of $8,108 million and debt on hospitality assets of $6,323 million.


⁽³⁾	Weighted against the fair value of the properties at December 31, 2019.


⁽⁴⁾	Excludes land and parking lots.

- ~~F-128~~F-79 -



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Limited Partnership Units ~~Limited Partnership Units~~	BPY	Nasdaq Stock Market
Limited Partnership Units	BPY.UN	Toronto Stock Exchange
Preferred Units, Series 1	BPYPP	Nasdaq Stock Market
Preferred Units, Series 2	BPYPO	Nasdaq Stock Market
Preferred Units, Series 3	BPYPN	Nasdaq Stock Market



Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Emerging growth company ¨



		Page
INTRODUCTION AND USE OF CERTAIN TERMS		7

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		11

PART I		12

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	12

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	12

ITEM 3.	KEY INFORMATION	12

3.A.	SELECTED FINANCIAL DATA	12

3.B.	CAPITALIZATION AND INDEBTEDNESS	12

3.C.	REASONS FOR THE OFFER AND USE OF PROCEEDS	12

3.D.	RISK FACTORS	13

ITEM 4.	INFORMATION ON THE COMPANY	3841

4.A.	HISTORY AND DEVELOPMENT OF THE COMPANY	3841

4.B.	BUSINESS OVERVIEW	3942

4.C.	ORGANIZATIONAL STRUCTURE	4852

4.D.	PROPERTY, PLANTS AND EQUIPMENT	5357

ITEM 4A.	UNRESOLVED STAFF COMMENTS	5357

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	5458

5.A.	OPERATING RESULTS	5458

5.B.	LIQUIDITY AND CAPITAL RESOURCES	~~106~~107

5.C.	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.	~~107~~109

5.D.	TREND INFORMATION	~~107~~109

5.E.	OFF-BALANCE SHEET ARRANGEMENTS	~~108~~109




5.F.	TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	~~108~~110

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	~~109~~111

6.A.	DIRECTORS AND SENIOR MANAGEMENT	~~109~~111

6.B.	COMPENSATION	~~111~~113

6.C.	BOARD PRACTICES	~~112~~114

6.D.	EMPLOYEES	~~115~~117

6.E.	SHARE OWNERSHIP	~~116~~118

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	~~116~~118

7.A.	MAJOR SHAREHOLDERS	~~116~~118

7.B.	RELATED PARTY TRANSACTIONS	~~117~~119

7.C.	INTERESTS OF EXPERTS AND COUNSEL	~~131~~141

ITEM 8.	FINANCIAL INFORMATION	~~132~~141

8.A.	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	~~132~~141

8.B.	SIGNIFICANT CHANGES	~~132~~141

ITEM 9.	THE OFFER AND LISTING	~~132~~141

9.A.	OFFER AND LISTING DETAILS	~~132~~141

9.B.	PLAN OF DISTRIBUTION	~~133~~141

9.C.	MARKETS	~~133~~142

9.D.	SELLING SHAREHOLDERS	~~133~~142

9.E.	DILUTION	~~133~~142

9.F.	EXPENSES OF THE ISSUE	~~133~~142

ITEM 10.	ADDITIONAL INFORMATION	~~134~~142

10.A.	SHARE CAPITAL	~~134~~142



CORE OFFICE PORTFOLIO		CORE RETAIL PORTFOLIO
Class A office assets in gateway markets around the globe		100 of the top 500 malls in the United States
l	136 premier properties	l	122 best-in-class malls and urban retail properties
l	93 million square feet	l	120 million square feet
l	93% occupancy	l	96% occupancy
l	8.5 year average lease term

LP INVESTMENTS PORTFOLIO
Invested in mispriced portfolios and/or properties with significant value-add



¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934



ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



U.S. GAAP ¨	International Financial Reporting Standards as issued by the International Accounting Standards Board	x	Other ¨




10.B.	MEMORANDUM AND ARTICLES OF ASSOCIATION	~~134~~142

10.C.	MATERIAL CONTRACTS	~~158~~170

10.D.	EXCHANGE CONTROLS	~~159~~171

10.E.	TAXATION	~~159~~171

10.F.	DIVIDENDS AND PAYING AGENTS	~~179~~191

10.G.	STATEMENT BY EXPERTS	~~179~~191

10.H	DOCUMENTS ON DISPLAY	~~179~~191

10.I.	SUBSIDIARY INFORMATION	~~180~~191

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	~~180~~192

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	~~180~~192

PART II		~~180~~192

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	~~180~~192

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	~~180~~192

ITEM 15.	CONTROLS AND PROCEDURES	~~180~~192

ITEM 16.	[RESERVED]	~~181~~193

16A.	AUDIT COMMITTEE FINANCIAL EXPERTS	~~181~~193

16B.	CODE OF ETHICS	~~181~~193

16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	~~181~~193

16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	~~182~~193

16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	~~182~~194

16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	~~182~~194

16G.	CORPORATE GOVERNANCE	~~182~~194



16H.	MINING SAFETY DISCLOSURE	~~182~~194

PART III		~~182~~195

ITEM 17.	FINANCIAL STATEMENTS	~~182~~195

ITEM 18.	FINANCIAL STATEMENTS	~~182~~195

ITEM 19.	EXHIBITS	~~184~~195

SIGNATURES		~~186~~198

INDEX TO FINANCIAL STATEMENTS		F-1


⁽¹⁾	~~Net income per LP Unit has been presented effective for the period from the date of the Spin-off on April 15, 2013, as this is the date of legal entitlement of earnings to the LP Units.~~


⁽²⁾	FFO is a non-IFRS measure. See “Introduction and Use of Certain Terms - Use of Non-IFRS Measures” and Item 5.A, “Operating ~~Results~~and Financial Review and Prospects - Operating Results- Financial Statements Analysis - Review of Consolidated Financial Results”.


⁽³⁾	~~For periods prior to April 15, 2013, the date of the Spin-off, the financial information reflected is that of Brookfield Asset Management’s commercial property operations.~~



Yes x	No ¨



Yes ¨	No x



Yes x	No ¨



Yes x	No ¨


⁽¹⁾	As at December 31, 2019, 2018, 2017, 2016 ~~2015~~ and ~~2014,~~2015, refers to holders of ~~our units,~~LP Units, GP Units, Redemption-Exchange Units, Special LP Units, ~~and~~ Exchange LP ~~Units. As of December 31, 2013, refers to holders of our units, GP units, Redemption-Exchange~~Units, FV LTIP Units and ~~Special LP Units.~~


⁽¹⁾	Represents assets and equity attributable to Unitholders related to our operating segments and excludes corporate assets and obligations.



Tenant	Primary Location	Credit Rating⁽¹⁾	Exposure (%)⁽²⁾
Government and Government Agencies	Various	AA+/AAA	~~8.7~~	%
~~Barclays~~	~~London~~	~~BBB~~	~~2.5~~7.6	%
Morgan Stanley	NY/~~Toronto~~London	A-	~~2.4~~2.7	%
~~Suncor Energy Inc.~~Barclays	~~Calgary/Houston/Sydney~~London/Toronto/Calgary	~~BBB+~~BBB-	~~2.0~~2.1	%
CIBC World Markets⁽³⁾	Calgary/~~NY/Toronto~~/Toronto/NY	A+AA	1.9	%
Suncor Energy Inc.	Calgary	BBB+	1.8	%
Cenovus	Calgary	BB+	1.5	%
Bank of Montreal	Calgary/Toronto	A+AA	1.5	%
Deloitte	Various	Not Rated	1.4	%
Bank of America \| Merrill Lynch	Various	A-	~~1.4~~	%
~~Deloitte~~	~~Calgary/Houston/LA/Toronto~~	~~Not Rated~~A	1.3	%
Amazon	NY/London	~~BBB+~~A-	1.3	%
~~Royal Bank of Canada~~	~~Various~~	A+	~~1.1~~	%
Total			~~23.9~~23.1	%


⁽¹⁾	From Standard & Poor’s Rating Services, Moody’s Investment Services, Inc. or DBRS Limited.


⁽²⁾	Prior to considering partnership interests in partially-owned properties.


⁽³⁾	CIBC World Markets leases 1.1 million square feet at 300 Madison Avenue in New York, of which they sublease ~~925,000~~940,000 square feet to PricewaterhouseCoopers LLP and approximately 100,000 square feet to Sumitomo Corporation of America.


◦	Employee Well-Being: Meet or exceed all applicable labor laws and standards, which includes respecting human rights, offering competitive wages and implementing nondiscriminatory, fully inclusive hiring practices.


◦	Health & Safety: Aim to have zero serious safety incidents by encouraging consistent health and safety principles across the organization.


◦	Community Engagement: Engage with community groups potentially affected by our actions to ensure that their interests, safety and well-being are appropriately integrated into our decision-making.


◦	Philanthropy: Empower employees to participate in, and use resources to give back, to local communities.


◦	Environmental Stewardship:Strive to minimize environmental impact and improve efficient use of resources over time.


◦	Governance, Ethics and Fairness: Operate with high ethical standards by conducting business activities in compliance with applicable legal and regulatory requirements, and consistent with our Code of Business Conduct and Ethics.


◦	Transparency: Be accessible to our investors and stakeholders by being responsive to requests for information and timely in our communication.


⁽⁴⁾	~~Our interest in BPO consists~~The majority of our Core Office portfolio is held through Brookfield Office Properties, Inc. (“BPO”). We own 100% of its outstanding common shares and outstanding voting preferred shares as well as interests in certain series of its non-voting preferred shares.


⁽⁵⁾	Our Australian office business consists of our ~~economic~~direct interest in ~~certain of~~ our Australian office properties not held through BPO.


⁽⁶⁾	Our interest in Canary Wharf is held through a joint venture owned 50% by our company and 50% by the Class A Preferred ~~Unitholder, or the Canary JV.~~Unitholder.


⁽⁷⁾	Our Brazilian office business, includes 67% ownership of an office building in Rio de Janeiro, Brazil and our interest in an office building in the Faria Lima section of São Paulo, Brazil.


⁽⁹⁾	Our economic interest set forth above is reflected as a range because our ~~Opportunistic investments~~LP Investments are held through Brookfield-sponsored real estate funds in which we hold varying interests.


⁽¹⁰⁾	Our interest in one of our opportunistic real estate finance funds is owned by the Property Partnership.



Name	Economic Interest⁽¹⁾	Voting Interest⁽¹⁾
Core Office
BPO⁽²⁾	100%	100%
Australia⁽³⁾	100%	—
Europe	100%	100%
Canary Wharf	50%	50%
Brazil	51% - 67%	51% - 67%
Core Retail
GGP⁽⁴⁾	34%	34%
Opportunistic
Opportunistic Office^(5,6)	22% - 82%	—
Rouse	50%	33%
Brazil Retail Fund⁽⁵⁾	40%	—
Opportunistic Retail	26%	—
Industrial^(5,6)	30% - 34%	—
Multifamily^(5,6)	13% - 61%	—
Hospitality^(5,6)	26% - 33%	—
Triple Net Lease^(5,6)	29%	—
Self-storage^(5,6)	26%	—
Student Housing^(5,6)	26%	—
Manufactured Housing^(5,6)	26%	—
Finance Funds^(5,6)	12% - 18%	—