Brookfield Properties Reports Strong Performance and Growth in 2007

Business Wire, Feb 7, 2008

All dollar references are in U.S. dollars unless noted otherwise.

NEW YORK -- Please replace the release with the following corrected version due to multiple revisions to the twelfth paragraph.

The corrected release reads:

BROOKFIELD PROPERTIES REPORTS STRONG PERFORMANCE AND GROWTH IN 2007

All dollar references are in U.S. dollars unless noted otherwise.

Brookfield Properties Corporation (BPO: NYSE, TSX) today announced that net income for the year ended December 31, 2007 was $240 million or $0.59 per diluted share, compared with $135 million or $0.37 per diluted share in 2006. Net income for the three months ended December 31, 2007 totaled $105 million or $0.26 per diluted share, compared to $21 million or $0.05 per diluted share during the same period in 2006.

During 2007, Brookfield Properties leased 8.8 million square feet of space at an average net rent of $30.32 per square foot, which represents a 28% improvement versus the average in-place net rent of $23.63 per square foot on expiring leases. The company's portfolio-wide occupancy rate finished the year at 95.6%, a 50 basis point improvement over 2006.

FINANCIAL RESULTS

Net income for the year ended December 31, 2007 was $240 million, or $0.59 per diluted share, compared to $135 million, or $0.37 per diluted share in 2006. Funds from operations ("FFO") for the year ended December 31, 2007 was $629 million or $1.57 per share, up from $443 million or $1.25 per diluted share in 2006.

For the three months ended December 31, 2007, net income was $105 million, or $0.26 per diluted share, compared to $21 million or $0.05 per diluted share during the same period in 2006. Funds from operations for the three months ended December 31, 2007 totaled $187 million or $0.47 per diluted share, up from $125 million or $0.35 per diluted share during the same period in 2006.

Commercial property net operating income for the year was $1,302 million, up from $836 million in 2006. Commercial property net operating income for the three months ended December 31, 2007 was $330 million, up from $312 million for the same period in 2006.

Residential development operations had a record year, contributing $237 million of net operating income in 2007, up from $144 million in 2006. Residential development operations contributed $80 million of net operating income in the fourth quarter of 2007, compared to $51 million in the same period of 2006.

HIGHLIGHTS OF THE FOURTH QUARTER

Acquired 49% minority interest in 53 and 75 State Street, Boston, for $477 million from RREEF, giving Brookfield Properties sole ownership of the two trophy properties, which in aggregate encompass 2.2 million square feet of Class A office space in Boston's financial district. The two buildings currently have a combined vacancy rate of 3.5%.

Completed five financings, generating $500 million in net proceeds including Royal Centre, Vancouver for $132 million; TD Canada Trust Tower, Toronto for $200 million; RBC Dain Rauscher Tower, Minneapolis, for $80 million; and a pre-development loan on the Ninth Avenue development site, New York for $105 million.

Pre-leased the Bay Adelaide Centre development, Toronto to 65% with the signing of law firm Heenan Blaikie LLP to a 15-year, 120,000 square foot lease subsequent to the fourth quarter. The LEED Gold tower is on schedule for tenant occupancy in mid-2009.

Sold Gulf Canada Square, Calgary, for $97 million, resulting in a gain of $27 million for Brookfield Properties' 25% interest. Brookfield Properties acquired the interest in this 1.1 million square foot building with the O&Y portfolio in 2005. In 2007, Brookfield Properties disposed of seven non-core properties totaling 3.2 million square feet, generating gains of $144 million.

Leased 3.8 million square feet of space during the fourth quarter of 2007, bringing the total amount of space leased for 2007 to 8.8 million square feet. New leases represent 44% of the total during the fourth quarter while renewals represent the remainder. Highlights include:

New York - 1,456,000 square feet

* A 20-year renewal with law firm Cleary Gottlieb Steen & Hamilton at One Liberty Plaza for a total of 548,000 square feet, including 100,000 square feet of expansion space

* A 15-month renewal through 2010 with Goldman Sachs for 518,000 square feet at One New York Plaza

* A new 15-year lease with AXA Equitable Life Insurance for 245,000 square feet at Newport Tower in Jersey City

Houston - 998,000 square feet

* A 12-year renewal and expansion with Devon Energy Company at Two and Three Allen Center for 732,000 square feet, including 70,000 square feet of expansion space

Toronto - 465,000 square feet

* An 8-year renewal with TD Bank for 191,000 square feet at TD Canada Trust Tower in Brookfield Place

Los Angeles - 450,000 square feet

* A 15-year lease renewal with law firm Sheppard Mullin Richter & Hampton totaling 185,000 square feet at Bank of America Plaza. The firm is an original tenant of the building, which opened in 1974

Ottawa - 138,000 square feet

* A 5-year expansion and renewal with the Government of Canada for 103,000 square feet at Place de Ville I