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First-quarter net earnings toppled by more than half at Brookfield Properties Corp., but the company says its commercial real estate operations are solid, helping to offset shakiness in residential.

Brookfield Properties, which reports in American currency, booked a profit of $23 million (U.S.), or six cents per share, for the first three months of this year, the company said yesterday. That was down from $53 million, or 13 cents, a year earlier, but that quarter included a $34 million gain on the sale of three properties in Toronto and Ottawa.

The company’s 76 million-square-foot portfolio includes the World Financial Center in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary.

Revenue increased to $665 million from $634 million. Funds from operations slipped to $126 million from $129 million.

Brookfield Properties, majority owned by Brookfield Asset Management Inc., said the commercial property operating profit rose 11.5 per cent to $349 million, while its residential operations suffered a 57 per cent profit setback to $18 million.

Despite that, "the fundamentals of the Western Canadian residential operations remain strong despite a slow quarter as a result of higher than normal housing inventory levels," the company said.

Those levels, however, could drop as the energy-fed boom continues in the West creditscore.

"With oil and natural gas prices hitting new highs, Brookfield Properties expects the residential division to continue to increase its sales pace, which has improved each month since the beginning of the year."

Brookfield Properties said its holdings were 95.4 per cent leased, and the average net rent swelled 42 per cent during the quarter to $32.71 per square foot.

Developments under construction were 53 per cent leased at March 31. A key project, the 1.2 million-square-foot Bay Adelaide Centre West Tower in downtown Toronto, "continues on budget and on schedule" and is 65 per cent pre-leased.

The Canadian Press

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