Brookfield Properties, a major real estate developer and operator, has laid off dozens of workers as commercial property companies struggle with reduced business during an overall market slowdown.
Brookfield Properties’ North America development group laid off less than 100 full-time employees in commercial development, according to someone familiar with the cuts. The company's North America development group has about 1,400 staff, and the larger Brookfield company said it has roughly 200,000 employees globally.
Brookfield Properties works on real estate investments on behalf of Brookfield Asset Management, one of the world's largest alternative asset managers with roughly $800 billion of assets under management that says it is based in Toronto and New York.
Brookfield joins other major real estate companies that are laying off employees due to challenging market conditions. Rising interest rates, economic uncertainty and lending hesitancy are among many factors real estate professionals say are stifling new development, sales and more.
“These reductions were a result of a strategic review following the recent combination of several of our development divisions into a single one covering all of North America, allowing us to streamline reporting structures," a Brookfield Properties spokesperson told CoStar News in an email. "We currently have more than $2.5 billion of active development underway, and this enhanced structure will ensure we deliver all of these projects efficiently and on time.”
Construction starts have slowed across the U.S. this year compared with 2022 for office, industrial, retail and multifamily property types. The latter real estate asset class has seen roughly 220,000 units start construction after a record-breaking roughly 727,000 units broke ground in 2022, according to CoStar data.
Earlier this year, the nation's largest brokerage firms were projecting that their capital markets income would fall in 2023 due to a slowdown in the commercial real estate market. CBRE, for example, began $400 million in cost cutting in October through layoffs as it faced economic headwinds. Other publicly traded brokerage firms announced layoffs in late 2022.
Companies based in the U.S. increased layoffs by 25% year over year in June, and total layoffs in the first half of the year were up 244% from the same time in 2022, according to a report by Challenger, Gray & Christmas. Tech layoffs were especially severe, increasing 2,300% from the first half of 2022.
Brookfield Properties manages more than 800 properties totaling roughly 330 million square feet across the world, according to its website. The company has more than 90 million square feet under active development.
Lou Hirsh contributed to this story.