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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2020~~2021

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from to

COMMISSION FILE NUMBER 1-34948

Brookfield Property REIT Inc.

(Exact name of registrant as specified in its charter)


Delaware			27-2963337
(State or other jurisdiction of incorporating or organization)			(I.R.S. Employer Identification Number)

250 Vesey Street, 15th Floor	New York	NY	10281-1023
(Address of principal executive offices)			(Zip Code)

(212) 417-7000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Stock, par value $.01 per share	BPYU	Nasdaq Global Select Market
6.375% Series A Cumulative Perpetual Redeemable Preferred Stock, par value $0.01 per share	BPYUP	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☒☐ Large accelerated filer ☐☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

The number of shares of Class A Stock, $.01 par value, outstanding on ~~November~~May 45, ~~2020~~2021 was 3938,~~129~~346,~~457~~260.

Brookfield Property REIT Inc.

INDEX

			PAGENUMBER
Part I	FINANCIAL INFORMATION
	Item 1: Financial Statements
		Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (Unaudited)	4
		Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (Unaudited)	3
		Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019 (Unaudited)	5
		Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (Unaudited)	4
		Consolidated Statements of Equity for the three and nine months ended September 30, 2020 and 2019 (Unaudited)	7
		Consolidated Statements of Equity for the three months ended March 31, 2021 and 2020 (Unaudited)	6
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (Unaudited)	11
		Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)	8
		Notes to Consolidated Financial Statements (Unaudited)	1310
		Note 1: Organization	1310
		Note 2: Summary of Significant Accounting Policies	1411
		Note 3: Acquisitions, Sales and Joint Venture Activity	2118
		Note 4: Fair Value	2419
		Note 5: Unconsolidated Real Estate Affiliates	2621
		Note 6: Mortgages, Notes and Loans Payable	2924
		Note 7: Leases	3327
		Note 8: Income Taxes	3530
		Note 9: Equity and Redeemable Noncontrolling Interests	3630
		Note 10: Earnings Per Share	4436
		Note 11: Stock-Based Compensation Plans	4437
		Note 12: Accounts Receivable, net	4638
		Note 13: Notes Receivable	4639
		Note 14: Prepaid Expenses and Other Assets	4739
		Note 15: Accounts Payable and Accrued Expenses	4840
		Note 16: Litigation	4840
		Note 17: Commitments and Contingencies	4941
		Note 18: Subsequent Events	4941
	Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations		5142
		Liquidity and Capital Resources	5444
	Item 3: Quantitative and Qualitative Disclosures about Market Risk		6453
	Item 4: Controls and Procedures		6554
Part II	OTHER INFORMATION
	Item 1: Legal Proceedings		6655
	Item 1A: Risk Factors		6655
	Item 2: Unregistered Sales of Equity Securities and Use of Proceeds		6756
	Item 3: Defaults Upon Senior Securities		6756
	Item 4: Mine Safety Disclosures		6756
	Item 5: Other Information		6856
	Item 6: Exhibits		6957
SIGNATURES			7058

PART I FINANCIAL INFORMATION

ITEM I FINANCIAL STATEMENTS

Brookfield Property REIT Inc.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2020		December 31, 2019
	March 31, 2021		December 31, 2020
	(Dollars in thousands, except share and per share amounts)
Assets:
Investment in real estate:
Land	$	3,~~719~~601,~~749~~549	$	3,~~659~~620,~~595~~513
Buildings and equipment	1413,~~225~~778,~~715~~850		1413,~~020~~968,~~589~~906
Less accumulated depreciation	(2,~~917~~978,~~298~~657)		(2,~~569~~967,~~911~~879)
Construction in progress	~~235~~270,~~186~~992		~~160~~256,~~443~~510
Net property and equipment	1514,~~263~~672,~~352~~734		1514,~~270~~878,~~716~~050
Investment in Unconsolidated Real Estate Affiliates	4,~~461~~256,~~997~~378		4,~~634~~342,~~292~~995
Net investment in real estate	1918,~~725~~929,~~349~~112		19,~~905~~221,~~008~~045
Cash and cash equivalents	~~173~~189,~~341~~183		~~197~~204,~~829~~541
Accounts receivable, net	~~563~~406,~~612~~241		~~234~~524,~~928~~982
Notes receivable	4438,~~572~~244		7645,~~310~~553
Deferred expenses, net	~~166~~156,~~956~~751		~~188~~158,~~591~~633
Prepaid expenses and other assets (see Notes 7 and 14)	~~757~~866,~~832~~199		~~745~~827,~~060~~746
Deferred tax assets, net	~~620~~652,~~058~~053		~~625~~655,~~660~~060
Total assets	$	22,051,720	$	21,973,386
Assets held for disposition	—		242,404
Total assets	$	21,237,783	$	21,879,964
Liabilities:
Mortgages, notes and loans payable (including related party debt - see Note 6)	$	16,~~330~~049,~~129~~687	$	1516,~~902~~114,~~894~~586
Investment in Unconsolidated Real Estate Affiliates	~~131~~153,~~201~~247		~~125~~151,~~565~~095
Accounts payable and accrued expenses (see Notes 7 and 15)	1935,~~025,044~~544		1993,~~027,130~~617
Dividend payable	~~454~~68		21903
Junior subordinated notes	206,200		206,200
Total liabilities	17,693,028		17,261,810
Liabilities held for disposition	—		263,141
Redeemable Class A equity interests	890,464		1,354,234
Total liabilities	17,344,746		17,729,542
Redeemable noncontrolling interests	61,670		62,235
Redeemable Class A equity interests	823,477		839,143
Total redeemable interests	952,134		1,416,469
Redeemable noncontrolling interests	60,453		60,826
Total redeemable interests	883,930		899,969
Equity:
Class B Stock & Series B Preferred Stock (collectively, "Combined Class B Stock"): 5,907,500,000 shares authorized, $0.01 par value, 520,528,095 and 493,665,297 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively (see Note 9)	5,206		4,937
Class B Stock & Series B Preferred Stock (collectively, "Combined Class B Stock"): 5,907,500,000 shares authorized, $0.01 par value, 527,421,814 and 526,042,279 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively (see Note 9)	5,275		5,261
Class C Stock: 1,000,000,000 shares authorized, $0.01 par value, 640,051,301 issued and outstanding as of September 30, 2020 and December 31, 2019	6,401		6,401
Class C Stock: 1,000,000,000 shares authorized, $0.01 par value, 640,051,301 issued and outstanding as of March 31, 2021 and December 31, 2020	6,401		6,401
Preferred Stock: 500,000,000 shares authorized, $0.01 par value, 10,000,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019	242,042		242,042
Preferred Stock: 500,000,000 shares authorized, $0.01 par value, 10,000,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020	242,042		242,042
Additional paid-in capital	7,~~245~~392,~~170~~558		67,~~670~~363,~~844~~064
Accumulated deficit	(5,~~426~~918,~~952~~536)		(5,~~076~~674,~~455~~064)
Accumulated other comprehensive loss	(~~102~~98,~~599~~374)		(8599,~~402~~418)
Total stockholders' equity	1,~~969~~629,~~268~~366		1,~~762~~843,~~367~~286
Noncontrolling interests in Consolidated Real Estate Affiliates	1412,~~062~~577		2613,~~210~~444
Noncontrolling interests of the Operating Partnership	1,~~423~~367,~~228~~164		1,~~506~~393,~~530~~723
Total equity	3,~~406~~009,~~558~~107		3,~~295~~250,~~107~~453
Total liabilities, redeemable interests and equity	$	2221,~~051~~237,~~720~~783	$	21,~~973~~879,~~386~~964

The accompanying notes are an integral part of these consolidated financial statements.

Brookfield Property REIT Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2020

2019

2020

2019

2021

2020

(Dollars in thousands, except per share amounts)

Revenues:

Rental revenues, net

326,~~707~~923

~~317~~351,~~469~~829

~~1,019,609~~

~~954,728~~

Management fees and other corporate revenues

2831,~~923~~501

4435,~~206~~338

~~90,826~~

~~123,444~~

Other

119,~~353~~974

1316,~~450~~463

~~34,643~~

~~34,368~~

Total revenues

~~366~~368,~~983~~398

~~375~~403,~~125~~630

~~1,145,078~~

~~1,112,540~~

Operating Expenses:

Real estate taxes

51,~~054~~093

4347,~~726~~807

~~147,517~~

~~126,955~~

Property maintenance costs

69,~~640~~803

69,~~297~~146

~~22,200~~

~~22,693~~

Marketing

~~1,197~~808

~~965~~764

~~3,602~~

~~2,790~~

Other property operating costs

5148,~~471~~877

4549,~~271~~821

~~138,554~~

~~129,768~~

Property management and other costs

6249,~~836~~283

5960,~~042~~975

~~181,335~~

~~174,339~~

General and administrative

5,~~753~~237

4,~~929~~890

~~15,645~~

~~15,661~~

Costs related to the BPY Transaction

—

9,179

Provision for note receivable loss

7,911

—

Provision for impairment

—106,991

~~38,794~~—

~~71,455~~

~~223,142~~

Depreciation and amortization

~~165~~151,~~200~~537

~~120~~157,~~249~~346

~~485,442~~

~~357,429~~

Total operating expenses

~~344~~431,~~151~~540

~~319~~330,~~273~~749

~~1,065,750~~

~~1,061,956~~

Interest and dividend income

1,~~969~~374

123,~~138~~096

~~5,828~~

~~23,451~~

Interest expense

(~~164~~169,~~443~~194)

(~~180~~178,~~755~~802)

~~(507,209)~~

~~(494,306)~~

Gain (loss) on extinguishment of debt

—

(27,542)

14,320

(27,542)

Gain on extinguishment of debt

13,123

—

Gain (loss) from changes in control of investment properties and other, net

—

39,712

(15,433)

39,712

Gain from changes in control of investment properties and other, net

1,824

—

Loss before income taxes, equity in income (loss) of Unconsolidated Real Estate Affiliates and related gain on investment, and allocation to noncontrolling interests

(~~139~~216,~~642~~015)

(~~100~~102,~~595~~825)

~~(423,166)~~

~~(408,101)~~

Benefit from (provision for) income taxes

(5,808)

14,021

(4,596)

6,068

Provision for income taxes

(2,943)

(5,428)

Equity in income (loss) of Unconsolidated Real Estate Affiliates

(44,155)

16,145

(105,424)

434

Equity in loss of Unconsolidated Real Estate Affiliates

(34,453)

(4,843)

Unconsolidated Real Estate Affiliates - (loss) gain on investment, net

(~~645~~2,140)

3312,~~640~~647

~~10,882~~

~~137,994~~

Net loss

(~~190~~255,~~250~~551)

(36100,~~789~~449)

~~(522,304)~~

~~(263,605)~~

Allocation to noncontrolling interests

1926,~~630~~430

318,~~366~~622

~~60,807~~

~~34,617~~

Net loss attributable to Brookfield Property REIT Inc.

(~~170~~229,~~620~~121)

(3381,~~423~~827)

~~(461,497)~~

~~(228,988)~~

Class A Stock Earnings Per Share (See Note 10):

Basic & Diluted Earnings Per Share

0.3325

0.~~3300~~3325

~~0.9975~~

~~0.9900~~

Brookfield Property REIT Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Continued)

(UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2020

2019

2020

2019

2021

2020

(Dollars in thousands, except per share amounts)

Comprehensive Loss, Net:

Net loss

(~~190~~255,~~250~~551)

(36100,~~789~~449)

~~(522,304)~~

~~(263,605)~~

Other comprehensive income (loss)

Foreign currency translation

~~(964)~~1,102

(514,~~472~~381)

~~(18,958)~~

~~(4,745)~~

Net unrealized gain (losses) on other financial instruments

~~(15)~~52

(721)

~~(120)~~

Other comprehensive loss

(979)

(5,544)

(18,919)

(4,865)

Other comprehensive income (loss)

1,154

(14,382)

Comprehensive loss

(~~191~~254,~~229~~397)

(42114,~~333~~831)

~~(541,223)~~

~~(268,470)~~

Comprehensive loss allocated to noncontrolling interests

1926,~~726~~320

318,~~366~~622

~~62,529~~

~~34,617~~

Comprehensive loss attributable to Brookfield Property REIT Inc.

(~~171~~228,~~503~~077)

(3896,~~967~~209)

~~(478,694)~~

~~(233,853)~~

The accompanying notes are an integral part of these consolidated financial statements.

Brookfield Property REIT Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Combined Class B Stock		Class C Stock		PreferredStock		AdditionalPaid-InCapital		Accumulated Deficit		Accumulated OtherComprehensive Loss		NoncontrollingInterests in Consolidated Real Estate Affiliates and Operating Partnership		TotalEquity		Redeemable Class A Stock
	(Dollars in thousands, except for per share and share amounts)
Balance at January 1, 2019	$	4,547	$	6,401	$	242,042	$	5,772,824	$	(4,721,335)	$	(82,653)	$	1,553,596	$	2,775,422	$	2,305,895
Balance at January 1, 2020	$	4,937	$	6,401	$	242,042	$	6,670,844	$	(5,076,455)	$	(85,402)	$	1,532,740	$	3,295,107	$	1,354,234
Net income (loss)									(~~315~~102,~~935~~334)				(3919,~~005~~532)		(~~354~~121,~~940~~866)		8620,~~947~~507
Distributions to noncontrolling interests in consolidated Real Estate Affiliates													(76,241)		(76,241)
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													(195)		(195)
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													1,188		1,188
Buyback of Class A Stock									2,082						2,082		(17,955)
Buyback of Class A Stock									5,283						5,283		(120,210)
Buyback of Class B-1 Stock															—
Buyback of Class B-1 Stock	(105)						(158,517)		(65,902)						(224,524)
Series K Preferred Unit redemption									1,868				(28,975)		(27,107)
Series K Preferred Unit redemption									941				(729)		212
Preferred stock dividend ($0.3984 per share)									(3,984)						(3,984)
Long Term Incentive Plan & Stock Option Expense									653						653
Other comprehensive loss											(14,382)				(14,382)
Restricted stock grants, net of forfeitures (607,450 shares of Class A Stock)															—		7,288
Restricted stock grants, net of forfeitures (814,702 Class A Stock)							—								—		1,257
Preferred stock dividend ($1.1952 per share)									(11,952)						(11,952)
Class A Conversion to Class B-1 (7,326,917 Class A Shares converted to 5,153,748 Class B-1 Shares)	51						110,187		43,629						153,867		(153,867)
Other comprehensive loss											(4,865)				(4,865)
Dividends on Class A Stock ($0.3325 per share)															—		(20,507)
Class A Conversion to Class B-1 (38,002,949 shares of Class A Stock converted to 33,919,596 shares of Class B-1 Stock)	340						725,201		72,522						798,063		(798,063)
Balance at March 31, 2020	$	4,988	$	6,401	$	242,042	$	6,781,031	$	(5,135,194)	$	(99,784)	$	1,484,038	$	3,283,522	$	1,183,669
Dividends on Class A Stock ($0.99 per share) and Combined Class B Stock (See Note 9)									(651,098)						(651,098)		(86,947)
Balance at September 30, 2019	$	4,782	$	6,401	$	242,042	$	6,339,508	$	(5,686,823)	$	(87,518)	$	1,438,809	$	2,257,201	$	1,394,910

Brookfield Property REIT Inc.CONSOLIDATED STATEMENTS OF EQUITY (Continued)(UNAUDITED)
	Combined Class B Stock		Class C Stock		PreferredStock		AdditionalPaid-InCapital		~~AccumulatedDeficit~~Accumulated Deficit		Accumulated OtherComprehensive Loss		NoncontrollingInterests in Consolidated Real Estate Affiliates and Operating Partnership		TotalEquity		Redeemable Class A Stock
	(Dollars in thousands, except for per share and share amounts)
Balance at July 1, 2019	$	4,664	$	6,401	$	242,042	$	6,087,409	$	(5,652,263)	$	(81,974)	$	1,453,857	$	2,060,136	$	1,674,301
Balance at January 1, 2021	$	5,261	$	6,401	$	242,042	$	7,363,064	$	(5,674,064)	$	(99,418)	$	1,407,167	$	3,250,453	$	839,143
Net income (loss)									(56242,~~318~~632)				(427,~~717~~354)		(61269,~~035~~986)		2213,~~900~~511
Distributions to noncontrolling interests in consolidated Real Estate Affiliates													(14,538)		(14,538)
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													(182)		(182)
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													4,392		4,392
Long Term Incentive Plan & Stock Option Expense									23						23
Long-Term Incentive Plan & Stock Option Expense									223						223
Buyback of Class A Stock									2,055						2,055		(17,681)
Buyback of Class A Stock									2,008						2,008		(5,668)
Series K Preferred Unit redemption									47						47
Series K Preferred Unit redemption									18				(185)		(167)
Preferred stock dividend ($0.3984 per share)									(3,984)						(3,984)
Other comprehensive loss											(51,~~544)~~044		110		(51,~~544)~~154
Restricted stock grants, net of forfeitures (25,562 shares of Class A Stock)															—		1,990
Restricted stock grants, net of forfeitures (855,051 Class A Stock)									17						17		2,025
Class A Conversion to Class B-1 (13,129,125 shares of Class A Stock converted to 11,791,341 shares of Class B-1 Stock)	118						252,099		23,493						275,710		(275,713)
Class A Conversion to Class B-1 (479 Class A Shares converted to 385 Class B-1 Shares)							8		2						10		(10)
Dividends on Class A Stock ($0.33 per share) and Combined Class B Stock (See Note 9)									—						—		(22,900)
Dividends on Class A Stock ($0.3325 per share)															—		(13,511)
Balance at September 30, 2019	$	4,782	$	6,401	$	242,042	$	6,339,508	$	(5,686,823)	$	(87,518)	$	1,438,809	$	2,257,201	$	1,394,910
Class B-1 Equity Issuance	14						29,486								29,500
Balance at March 31, 2021	$	5,275	$	6,401	$	242,042	$	7,392,558	$	(5,918,536)	$	(98,374)	$	1,379,741	$	3,009,107	$	823,477

Brookfield Property REIT Inc.CONSOLIDATED STATEMENTS OF EQUITY (Continued)(UNAUDITED)
	Combined Class B Stock		Class C Stock		PreferredStock		AdditionalPaid-InCapital		Accumulated Deficit		Accumulated OtherComprehensive Loss		NoncontrollingInterests in Consolidated Real Estate Affiliates and Operating Partnership		TotalEquity		Redeemable Class A Stock
	(Dollars in thousands, except for per share and share amounts)
Balance at January 1, 2020	$	4,937	$	6,401	$	242,042	$	6,670,844	$	(5,076,455)	$	(85,402)	$	1,532,740	$	3,295,107	$	1,354,234
Net income (loss)									(516,388)				(63,524)		(579,912)		54,891
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													(336)		(336)
Buyback of Class A Stock									92,822						92,822		(226,431)
Series K Preferred Unit redemption									2,149				(29,868)		(27,719)
Long Term Incentive Plan & Stock Option Expense									54						54
Preferred stock dividend ($1.19532 per share)									(11,953)						(11,953)
Other comprehensive loss											(17,197)		(1,722)		(18,919)
Restricted stock grants, net of forfeitures (784,517 shares of Class A Stock)							—								—		5,808
Class A Conversion to Class B-1 (11,578,482 shares of Class A Stock converted to 7,495,510 shares of Class B-1 Stock)	75						160,253		82,819						243,147		(243,147)
Dividends on Class A Stock ($0.9975 per share)															—		(54,891)
Class B Equity Issuance	194						414,073								414,267
Balance at September 30, 2020	$	5,206	$	6,401	$	242,042	$	7,245,170	$	(5,426,952)	$	(102,599)	$	1,437,290	$	3,406,558	$	890,464

Brookfield Property REIT Inc.CONSOLIDATED STATEMENTS OF EQUITY (Continued)(UNAUDITED)
	Combined Class B Stock		Class C Stock		PreferredStock		AdditionalPaid-InCapital		AccumulatedDeficit		Accumulated OtherComprehensive Loss		NoncontrollingInterests in Consolidated Real Estate Affiliates and Operating Partnership		TotalEquity		Redeemable Class A Stock
	(Dollars in thousands, except for per share and share amounts)
Balance at July 1, 2020	$	4,992	$	6,401	$	242,042	$	6,788,182	$	(5,361,146)	$	(101,715)	$	1,458,562	$	3,037,318	$	1,172,745
Net income (loss)									(185,956)				(20,531)		(206,487)		15,336
Distributions to noncontrolling interests in consolidated Real Estate Affiliates and Operating Partnership															—
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates													(204)		(204)
Buyback of Class A Stock									90,740						90,740		(208,476)
Series K Preferred Unit redemption									270				(441)		(171)
Long Term Incentive Plan & Stock Option Expense									23						23
Preferred stock dividend ($0.3984 per share)									(3,984)						(3,984)
Other comprehensive loss											(884)		(96)		(980)
Restricted stock grants, net of forfeitures (21,758 shares of Class A Stock forfeited)															—		2,231
Class A Conversion to Class B-1 (3,620,879 shares of Class A Stock converted to 2,007,259 shares of Class B-1 Stock)	20						42,915		33,101						76,036		(76,036)
Dividends on Class A Stock ($0.33 per share)															—		(15,336)
Class B Equity Issuance	194						414,073								414,267
Balance at September 30, 2020	$	5,206	$	6,401	$	242,042	$	7,245,170	$	(5,426,952)	$	(102,599)	$	1,437,290	$	3,406,558	$	890,464

The accompanying notes are an integral part of these consolidated financial statements.

Brookfield Property REIT Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2020		2019
	2021		2020
	(Dollars in thousands)
Cash Flows (used in) provided by Operating Activities:
Net (loss) income	$	(~~522~~255,~~304~~551)	$	(~~263~~100,~~605~~449)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Equity in (income) loss of Unconsolidated Real Estate Affiliates	105,424		(434)
Equity in loss of Unconsolidated Real Estate Affiliates	34,453		4,843
Distributions received from Unconsolidated Real Estate Affiliates	356,~~703~~327		7917,~~267~~305
Provision for doubtful accounts	~~56,475~~(171)		84,~~244~~973
Depreciation and amortization	~~485~~151,~~442~~537		~~357~~157,~~429~~346
Amortization/write-off of deferred finance costs	259,~~240~~153		217,~~644~~906
Accretion/write-off of debt market rate adjustments	(~~1,110~~406)		(~~1,255~~336)
Amortization of intangibles other than in-place leases	(3,~~261~~712)		(28,~~480)~~054
Amortization of right-of-use assets	72,~~681~~397		32,~~934~~930
Straight-line rent amortization	(514,~~943~~098)		(54,~~633~~476)
Deferred income taxes	53,~~601~~007		~~(10~~6,~~810)~~419
Unconsolidated Real Estate Affiliates - loss on investment, net	(10,882)		(137,994)
Unconsolidated Real Estate Affiliates - loss (gain) on investment, net	2,140		(12,647)
Gain (loss) from changes in control of investment properties and other, net	15,433		(39,712)
Gain from changes in control of investment properties and other, net	(1,824)		—
Provision for impairment	71106,~~455~~991		~~223,142~~—
(Gain) loss on extinguishment of debt	(14,320)		27,542
Gain on extinguishment of debt	(13,123)		—
Provision for loan loss	7,911		—
Net changes:
Accounts and notes receivable, net	~~(364~~132,~~587)~~177		45(8,~~614~~732)
Prepaid expenses and other assets (see Notes 7 and 14)	~~(27~~22,~~640)~~298		(43,~~137)~~420
Deferred expenses, net	(24,~~055~~780)		(131,~~012~~433)
Accounts payable and accrued expenses (see Notes 7 and 15)	53(30,~~684~~549)		(3968,~~910~~036)
Other, net	(31,~~707)~~439		4(6,~~359~~104)
Net cash (used in) provided by operating activities	~~(93~~155,~~671)~~616		~~252~~10,~~193~~983
Cash Flows (used in) Investing Activities:
Acquisition of real estate and property additions	—		(169,596)
Development of real estate and property improvements	(67,333)		(83,623)
Development of real estate and property improvements	(219,670)		(381,811)
Proceeds from repayment of loans to joint venture and joint venture partners	10		—
Loans to affiliates	—		(330,000)
Net proceeds from sales of investment properties and Unconsolidated Real Estate Affiliates	(1,940)		81,024
Loans to joint venture and joint venture partners	(2,168)		(97,548)
Contributions to Unconsolidated Real Estate Affiliates	(22,767)		(20,831)
Proceeds from repayment of loans to affiliates	—		330,000
Distributions received from Unconsolidated Real Estate Affiliates in excess of income	68,633		34,685
Proceeds from repayment of loans to joint venture and joint venture partners	—		18,020
Net cash (used in) investing activities	(23,397)		11,255
Proceeds from sales of investment properties and Unconsolidated Real Estate Affiliates	84,450		173,774
Contributions to Unconsolidated Real Estate Affiliates	(75,226)		(208,277)
Distributions received from Unconsolidated Real Estate Affiliates in excess of income	29,684		269,465
Net cash (used in) investing activities	(182,930)		(395,973)
Cash Flows provided by Financing Activities:
Proceeds from refinancing/issuance of mortgages, notes and loans payable (including related party debt - see Note 6)	~~811~~40,~~053~~177		4246,~~653,639~~000
Principal payments on mortgages, notes and loans payable - (including related party debt - see Note 6)	(~~751~~113,~~174~~820)		(3222,~~364,544~~687)
Payment of deferred finance costs	(~~6,343~~221)		~~(30,471)~~—
Issuances of Class B Stock	~~414~~29,~~266~~500		—
Buyback of Class A Stock	(~~133~~15,~~609~~625)		(~~114~~15,~~927~~873)
Buyback of Combined Class B Stock	—		(224,524)
Series K preferred unit redemptions	(326)		(28,387)
Series K preferred unit redemptions	(28,284)		(14,719)
Cash contributions from noncontrolling interests in consolidated real estate affiliates	—		31,688
Cash contributions from noncontrolling interests in consolidated real estate affiliates	31,688		—
Cash distributions paid to stockholders	(13,511)		(20,507)
Cash distributions to noncontrolling interests in consolidated real estate affiliates	—		(67,035)
Cash distributions paid to preferred stockholders	(3,984)		—
Cash distributions paid to stockholders	(54,891)		(738,043)
Cash distributions and redemptions paid to unit holders	(1,941)		(1,104)
Cash distributions paid to preferred stockholders	(11,953)		(11,952)
Net cash provided by financing activities	(79,751)		(10,870)
Cash distributions and redemptions paid to unit holders	(2,881)		(5,248)
Net change in cash, cash equivalents and restricted cash	52,468		11,368
Net cash provided by financing activities	267,872		82,176
Cash, cash equivalents and restricted cash at beginning of period	368,610		275,512
Net change in cash, cash equivalents and restricted cash	(8,729)		(61,604)
Cash, cash equivalents and restricted cash at end of period	$	421,078	$	286,880
Cash, cash equivalents and restricted cash at beginning of period	275,512		298,693
Cash, cash equivalents and restricted cash at end of period	$	266,783	$	237,089

108

Brookfield Property REIT Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(UNAUDITED)
	Nine Months Ended September 30,
	Three Months Ended March 31,
	2020		2019
	2021		2020
	(Dollars in thousands)
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	~~475~~134,~~778~~253	$	~~484~~169,~~479~~715
Interest capitalized	52,~~417~~509		131,~~412~~687
Income taxes paid	7,064		5,994
Income taxes paid (refund)	(96)		571
Accrued capital expenditures included in accounts payable and accrued expenses	~~265~~253,~~716~~425		~~221~~279,~~995~~545
Cash paid for amounts included in the measurement of lease liabilities	62,~~947~~377		62,~~406~~336
Recognition of right-of-use asset	—		73,633
Lease liabilities arising from obtaining right-of-use lease asset	—		73,633
Straight-line ground rent asset reclassed to right-of-use asset	—		53,779
Straight-line ground rent liability reclassed to right-of-use asset	—		3,817
Straight-line building rent liability reclassed to right-of-use asset	—		3,599
Non-cash transfer of legal rights for Coronado Center Mall (see Note 3)	—		53,100
Non-cash satisfaction of notes receivable from joint venture partner (see Note 3)	—		250,000
Non-cash transfer of legal rights for Mall in Columbia (see Note 3)	45,500		—

The accompanying notes are an integral part of these consolidated financial statements.

119

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 1 ORGANIZATION

Readers of this Quarterly Report on Form 10-Q (this "Quarterly Report") should refer to the Company's (as defined below) audited consolidated financial statements for the year ended December 31, ~~2019~~2020 which are included in the Company's Annual Report on Form 10-K (our "Annual Report") for the fiscal year ended December 31, ~~2019~~2020 (Commission File No. 001-34948), as certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been omitted from this Quarterly Report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this Quarterly Report. Unless context otherwise requires, capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report.

General

Brookfield Property REIT Inc. (referred to herein as "BPYU" or the "Company"), formerly known as GGP Inc. ("GGP"), a Delaware corporation, was organized in July 2010 and is an externally managed real estate investment trust ("REIT").

On March 26, 2018, GGP and Brookfield Property Partners L.P. ("BPY") entered into an agreement and plan of merger (as amended by the amendment thereto dated June 25, 2018, the "Merger Agreement") pursuant to which BPY ~~would~~acquired ~~acquire~~ all of the shares of GGP common stock, par value $0.01 per share, that BPY and its affiliates did not already own through a series of transactions (collectively, the "BPY Transaction of 2018"), including, among other things, the exchange of all shares of GGP common stock owned by certain affiliates of BPY and any subsidiary of GGP for a newly authorized series of preferred stock of GGP designated Series B Preferred Stock (the "Class B Exchange") and the payment of a special dividend payable to certain holders of record of GGP common stock pursuant to the terms of the Merger Agreement (the "Pre-Closing Dividend").

BPYU is an indirect subsidiary of BPY, one of the world's largest commercial real estate companies. In these notes, the terms "we," "us" and "our" refer to BPYU and its subsidiaries. BPYU, through its subsidiaries and affiliates, is an owner and operator of retail properties. As of ~~September~~March 3031, ~~2020~~2021, we were the owner, either entirely or with joint venture partners, of ~~122~~119 retail properties in the United States.

Substantially all of our business is conducted through BPR OP, LP ("BPROP"), which we sometimes refer to herein as the Operating Partnership, and its subsidiaries. As of ~~September~~March 3031, ~~2020~~2021, BPYU held approximately 99% of the common equity of BPROP, while the remaining 1% was held by limited partners and certain previous contributors of properties to BPROP.

In addition to holding ownership interests in various joint ventures, the Operating Partnership generally conducts its operations through BPR REIT Services LLC ("BPRRS"), Brookfield Properties Retail Inc. ("BPRI") and General Growth Management, Inc. ("GGMI"). Each of GGMI and BPRI is a taxable REIT subsidiary ("TRS"), which earn real estate management, leasing, development, and financing fees for other ancillary services for a majority of our Unconsolidated Real Estate Affiliates (defined below) and for substantially all of our Consolidated Properties (defined below). BPRI also serves as a contractor to GGMI for these services and provides fee-based services to other affiliates of BPY. BPRRS generally provides financial, accounting, tax, legal, development, and other services to our Consolidated Properties.

We refer to our ownership interests in properties in which we own a majority or controlling interest and are consolidated under accounting principles generally accepted in the United States of America ("GAAP") as the "Consolidated Properties." We also own interests in certain properties through joint venture entities in which we own a noncontrolling interest ("Unconsolidated Real Estate Affiliates") and we refer to those properties as the "Unconsolidated Properties".

12On April 1, 2021, Brookfield Asset Management Inc. ("Brookfield Asset Management" or "BAM") announced an agreement to acquire all of the limited partnership units of BPY that it does not already own ("BPY units") at a value of $18.17 per BPY unit, or $6.5 billion in total value. Under the agreement, BPY unitholders are expected to have the ability to elect to receive, per BPY unit and subject to pro ration, a combination of (i) 0.3979 Class A limited voting shares of BAM ("Brookfield Shares"), (ii) $18.17 in cash, and/or (iii) 0.7268 of BPY preferred units with a liquidation preference of $25.00 per unit. Pro-ration will be based on a maximum cash consideration of approximately 50% of the total value of the BPY units ($3.27 billion in total cash payable to public unitholders), a maximum amount of Brookfield Shares equal to approximately 42% of the total value of the BPY units (59.3 million Brookfield Shares payable to public unitholders), and a maximum amount of BPY preferred units with

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

a liquidation value of approximately 8% of the total value of the BPY units ($500 million in liquidation preference of BPY preferred units payable to public unitholders).

In accordance with the terms of the Company's charter, any holders of the Company's Class A Stock at the closing of the transaction will receive the same per share consideration as will be received by BPY unitholders who have not made an election, being a combination of approximately 50% cash, 42% Brookfield Shares and 8% BPY preferred units (subject to pro-ration). The aggregate consideration of $6.5 billion payable to BPY unitholders in the transaction includes the amount payable to the public holders of shares of the Company's Class A Stock. It is also expected that the Company's 6.375% Series A Cumulative Redeemable Preferred Stock will be redeemed at its par value of $25.00 per share, plus any accrued and unpaid dividends, at or around the closing of the transaction.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of BPYU, our subsidiaries and joint ventures in which we have a controlling interest. For consolidated joint ventures, the noncontrolling partner's share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner's ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. Intercompany balances and transactions have been eliminated. Noncontrolling interests are included on our Consolidated Balance Sheets related to the Common, Preferred, and LTIP Units of BPROP and are presented either as redeemable noncontrolling interests or as noncontrolling interests in our permanent equity. The Operating Partnership and each of our consolidated joint ventures are variable interest entities as the limited partners do not have substantive kick-out rights or substantive participating rights. However, as the Company holds a majority voting interest in the Operating Partnership and our consolidated joint ventures, it qualifies for the exemption from providing certain of the disclosure requirements associated with variable interest entities.

We operate in a single reportable segment, which includes the operation, development and management of retail and other rental properties. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. The Company's chief operating decision maker is comprised of a team of several members of executive management who use property operations in assessing segment operating performance. We do not distinguish or group our consolidated operations based on geography, size or type for purposes of making property operating decisions. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. There are no individual operating segments that are greater than 10% of combined revenue or combined assets. When assessing segment operating performance, certain non-cash and non-comparable items such as straight-line rent, depreciation expense and intangible asset and liability amortization are excluded from property operations, which are a result of GGP's emergence from bankruptcy, acquisition accounting and other capital contribution or restructuring events. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company's operating properties are aggregated into a single reportable segment.

Acquisitions of Operating Properties (Note 3)

The fair values of tangible assets are determined on an "if vacant" basis. The "if vacant" fair value is allocated to land, where applicable, buildings, equipment and tenant improvements based on comparable sales and other relevant information with respect to the property. Specifically, the "if vacant" value of the buildings and equipment was calculated using a cost approach utilizing published guidelines for current replacement cost or actual construction costs for similar, recently developed properties; and an income approach. Assumptions used in the income approach to the value of buildings include: capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and site improvement value.

The estimated fair value of in-place tenant leases includes lease origination costs (costs we would have incurred to lease the property to the current occupancy level of the property) and the lost revenues during the period necessary to lease-up from vacant to current occupancy level. Such estimates include the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, we evaluate the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance, and utilities) incurred during the lease-up period, which generally ranges up to one year. The fair value of the acquired in-place tenant leases is included in the balance of buildings and equipment and amortized over the remaining lease term for each tenant.11

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where we are the lessor or the lessee. The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably certain. The remaining term of leases with renewal options at terms significantly below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

The gross asset balances and accumulated amortization of the in-place value of tenant leases are included in buildings and equipment in our Consolidated Balance Sheets.

Gross Asset

AccumulatedAmortization

Net CarryingAmount

As of September 30, 2020

As of March 31, 2021

Tenant leases:

In-place value

~~314~~273,~~921~~556

(9995,~~142~~810)

~~215~~177,~~779~~746

As of December 31, 2019

As of December 31, 2020

Tenant leases:

In-place value

~~311~~302,~~838~~296

(72107,~~658~~210)

~~239~~195,~~180~~086

The above-market tenant leases are included in prepaid expenses and other assets (Note 14); the below-market tenant leases are included in accounts payable and accrued expenses (Note 15) in our Consolidated Balance Sheets.

Amortization/accretion of all intangibles, including the intangibles in Note 14 and Note 15, had the following effects on our income from continuing operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2020		2019		2020		2019
	2021		2020
Amortization/accretion effect on continuing operations	$	(1613,~~079~~629)	$	(829,~~665~~059)	$	~~(61,235)~~	$	~~(18,446)~~

Future amortization/accretion of all intangibles, including the intangibles in Note 14 and Note 15, is estimated to decrease results from continuing operations as follows:

Year	Amount
2020 Remaining	$	14,771
2021 Remaining	$	29,775
2021	42,449
2022	31,049
2022	31,641
2023	23,649
2023	24,163
2024	19,514
2024	19,974
2025	16,967

~~Revenue Recognition and Related Matters~~12

Accounting for real estate sales distinguishes between sales to a customer or non-customer for purposes of revenue recognition. Once we, as the seller, determine that we have a contract, we will identify each distinct non-financial asset promised to the counter-party and whether the counter-party obtains control and transfers risks and rewards of ownership of each non-financial asset to determine if we should derecognize the asset.

Leases

We have entered into lease arrangements for the land and buildings at certain properties, as well as for the use of office space in Chicago, Illinois. We account for leases under Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842", "Topic 842", or "the new leasing standard").

The new leasing standard requires lessees to record a right-of-use ("ROU") asset and a related lease liability for the rights and obligations associated with all lessee leases. Accounting Standards Codification ("ASC") 842 also modified the lease classification criteria through the elimination of "bright-line" tests, the removal of historical real estate specific lease provisions, and changes to lessor accounting to align with the new revenue recognition standard ASC 606, Revenue from Contracts with Customers.

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

(Unaudited)

Revenue Recognition and Related Matters

Leases

We elected to use the following additional practical expedients permitted by the new leasing standard:

•The short-term lease election that allows a lessee not to apply the balance sheet recognition requirements to leases with a term of 12 months or less; lease payments associated with these leases are recognized on a straight-line basis as an expense over the lease term and are not material.

•The practical expedient which allows a lessee to not separate lease and non-lease components. We have elected to apply this election to all classes of underlying assets.

Lessee arrangements

To account for leases for which we are the lessee under the new leasing standard, contracts must be analyzed upon inception to determine if the arrangement is, or contains, a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification tests and measurement procedures are performed at the lease commencement date. Differences in lease classification will affect only the pattern and classification of expense recognition in our Consolidated Statements of Operations and Comprehensive Income (Loss).

The lease liability is initially measured as the present value of the lease payments over the lease term, discounted using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the lessee’s incremental borrowing rate is used. The lease liability balance is subsequently amortized using the effective interest method. The incremental borrowing rate is determined using an approach based on the rate of interest that the lessee would pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. We utilized a market-based approach to estimate the Incremental Borrowing Rate ("IBR") for each individual lease. The approach required significant judgment. Therefore, we utilized different data sets to estimate base IBRs via an analysis of (i) yields on outstanding public debt of BPYU, as well as comparable companies, (ii) observable mortgage rates, and (iii) unlevered property yields and discount rates. We then applied adjustments to account for considerations related to (i) term and (ii) security that may not be fully incorporated by the aforementioned data sets. Based on individual characteristics of each lease, we selected an IBR taking into consideration how each data approach and adjustments thereto incorporate term, currency and security.

The lease term is the noncancelable period of the lease, and includes any renewal and termination options we are reasonably certain to exercise. The reasonably certain threshold is evaluated at lease commencement and is typically met if substantial economic incentives or termination penalties are identified.

Lease payments measured at the commencement date include fixed payments, in-substance fixed payments, variable lease payments dependent on a rate or index (using the index or rate in effect at lease commencement), any purchase option the lessee is reasonably certain to exercise, and payments of penalties for terminating the lease if the lease term reflects the lessee exercising the termination option. Fully variable lease payments without an in-substance fixed component are not included in the measurement of the lease liability and are recognized in the period in which the underlying contingency is resolved.

The lease liability is remeasured when the contract is modified, upon the resolution of a contingency such that variable payments become fixed or if our assessment of exercising an extension, termination or purchase option changes. Once remeasured, an adjustment is made to the ROU asset. However, if the carrying amount of the right-of-use asset is reduced to zero, any remaining amount of the remeasurement is recognized in earnings. 13

The ROU asset balance is initially measured as the lease liability amount, adjusted for any lease payments made prior to the commencement date, initial direct costs, estimated costs to dismantle, remove, or restore the underlying asset and incentives received.

Our current lessee lease portfolio is comprised primarily of operating leases. If we enter into a finance lease, the new leasing standard requires us to initially recognize and measure these leases using the same method as described above for operating leases. Subsequent to initial recognition, each lease payment would be allocated between interest expense and a reduction of the lease liability. This expense would be recognized over the lease term using the interest method to produce a constant periodic rate of interest on the remaining balance of the liability for each period and would be included in interest expense in our Consolidated Statements of Operations and Comprehensive Income (Loss). The ROU asset would be amortized on a straight-line basis over the lease term, with depreciation recorded in depreciation and amortization in our Consolidated Statements of Operations and Comprehensive Income (Loss).

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

(Unaudited)

exercising the termination option. Fully variable lease payments without an in-substance fixed component are not included in the measurement of the lease liability and are recognized in the period in which the underlying contingency is resolved.

The ROU assets in our operating leases are evaluated for impairment in a manner similar to our operating properties, as described below under "Impairment".

Lessor arrangements

At the inception of a new lease arrangement, including new leases that arise from amendments, we assess the terms and conditions to determine the proper lease classification. When the terms of a lease effectively transfer control of the underlying asset, the lease is classified as a sales-type lease. When a lease does not effectively transfer control of the underlying asset to the lessee, but we obtain a guarantee for the value of the asset from a third party, we classify the lease as a direct financing lease. All other leases are classified as operating leases. Control of the underlying asset is transferred to the lessee if any of the following criteria are met: (i) transfer of ownership to the lessee prior to or shortly after the end of the lease term, (ii) lessee has an option to purchase the underlying property that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the underlying property’s remaining economic life, (iv) the present value of the sum of lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments is equal to or exceeds substantially all of the fair value of the leased property or (v) the underlying property is of such a specialized nature that it is expected to have no alternative use at the end of the lease term. As of ~~September~~March 3031, ~~2020~~2021, we do not have any material sales-type or direct financing leases.

For operating leases with minimum scheduled rent increases, we recognize rental income on a straight-line basis, including the effect of any free rent periods, over the lease term when collectability of lease payments (and, if applicable, any amounts necessary to satisfy a residual value guarantee) is probable. Variable lease payments are recognized as rental income in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Variable lease payments include overage rent, which is paid by a tenant when the tenant's sales exceed an agreed upon minimum amount, is recognized once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease.

Our leases also contain provisions for tenants to reimburse us for real estate taxes and insurance, as well as for other property operating expenses, marketing costs, and utilities, which are considered to be non-lease components. These tenant reimbursements are most often established in the leases or in less frequent cases computed based upon a formula. We have elected the practical expedient to not separate non-lease components from the lease component for all classes of underlying assets and determined that the lease component is the predominant component in the contract; therefore, these recoveries are recognized in a manner similar to minimum rents and variable rents within rental revenues on our Consolidated Statements of Operations and Comprehensive Income (Loss).

Recognizing rental and related income on a straight-line basis results in a difference in the timing of revenue recognition from what is contractually due from tenants. Straight-line rents are recorded in accounts receivable, net in our Consolidated Balance Sheets. For leases where collectability of substantially all the lease payments is probable, we establish an allowance for doubtful accounts against the portion of accounts receivable, net, including straight-line rents, which is estimated to be uncollectible. Such estimates are based on our previous recovery experience and expectations of future lease concessions. Lease concessions are generally considered a lease modification and thus are recognized prospectively over the remaining lease term. However, the Company does include its estimate of potential lease concessions when establishing its general reserve, based on its best estimates of total lease concessions expected, recognizing the portion of the total concession that is deemed attributable to the current period through consideration of weighted average remaining lease terms. Changes in the general allowance are recognized in rental income on our Consolidated Statements of Operations and Comprehensive Income (Loss). If we determine that collectability of substantially all the lease payments is not probable, we record a current-period adjustment to rental income to amount of cash collected from the lessee. This adjustment effectively reduces cumulative income recognized since lease commencement from an accrual basis to cash basis. In addition, future revenue recognition is limited to amounts paid by the lessee. We will generally return to an accrual basis of accounting, if and when, all delinquent payments become current under the terms of the lease agreement and collectability of substantially all the remaining contractual lease payments is reasonably probable. 14

With respect to our consolidated properties, for the three and nine months ended September 30, 2020, we have recorded $36.9 million and $59.8 million, respectively, associated with potentially uncollectible revenues, which includes $2.4 million

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

(Unaudited)

Recognizing rental and ~~$7.4 million,~~related ~~respectively,~~income ~~for~~on a straight-line ~~rent~~basis ~~receivables~~results in a difference in the timing of revenue recognition from what is contractually due from tenants. ~~With~~Straight-line ~~respect~~rents toare recorded in accounts receivable, net in our ~~Unconsolidated~~Consolidated ~~Real~~Balance ~~Estate~~Sheets. ~~Affiliates~~For leases where collectability of substantially all the lease payments is probable, we establish an allowance for ~~the~~doubtful ~~three~~accounts ~~and~~against ~~nine~~the ~~months~~portion ~~ended~~of ~~September~~accounts 30receivable, ~~2020~~net, including straight-line rents, which is estimated to be uncollectible. Such estimates are based on our ~~Unconsolidated~~previous ~~Real~~recovery ~~Estate~~experience ~~Affiliates~~and ~~have~~expectations ~~recorded~~of ~~$47~~future lease concessions.~~4 million~~ Lease concessions are generally considered a lease modification and ~~$81~~thus are recognized prospectively over the remaining lease term.~~0 million~~ However, ~~respectively~~the Company does include its estimate of potential lease concessions when establishing its general reserve, ~~associated~~based ~~with~~on ~~potentially~~its ~~uncollectible~~best ~~revenues~~estimates of total lease concessions expected, ~~which~~recognizing ~~includes~~the $3portion of the total concession that is deemed attributable to the current period through consideration of weighted average remaining lease terms.~~0 million~~ Changes in the general allowance are recognized in rental income on our Consolidated Statements of Operations and ~~$10~~Comprehensive Income (Loss).~~1 million,~~ ~~respectively~~If we determine that collectability of substantially all the lease payments is not probable, ~~for~~we ~~straight~~record a current-~~line~~period ~~rent~~adjustment ~~receivables.~~to Ofrental ~~these~~income ~~amounts~~to ~~for~~amount of cash collected from the ~~three~~lessee. ~~and~~This ~~nine~~adjustment ~~months~~effectively ~~ended~~reduces ~~September~~cumulative ~~30,~~income ~~2020,~~recognized ~~our~~since ~~share~~lease ~~totaled~~commencement ~~$24.9 million~~from ~~and~~an ~~$40~~accrual basis to cash basis.~~1 million,~~ ~~respectively~~In addition, ~~which~~future ~~includes~~revenue ~~$1.5 million~~recognition ~~and~~is $4limited to amounts paid by the lessee.~~8 million~~ We will generally return to an accrual basis of accounting, ~~respectively~~if and when, ~~for~~all ~~straight-line~~delinquent ~~rent~~payments ~~receivables~~become current under the terms of the lease agreement and collectability of substantially all the remaining contractual lease payments is reasonably probable.

AsWith ofrespect ~~September~~to ~~30,~~our ~~2020,~~consolidated ~~the Company~~properties, ~~including~~for ~~consideration~~the ofthree ~~our~~months ~~share~~ended ~~of Unconsolidated Real Estate Affiliates~~March 31, ~~has collected approximately 65% of third quarter rents~~2021, ~~and~~our ~~collections~~balance ~~continue~~associated towith ~~increase~~potentially ~~subsequent~~uncollectible torevenues ~~quarter~~decreased ~~end~~by $3.7 million. ~~While~~With ~~working~~respect to ~~preserve~~ our ~~profitability~~Unconsolidated ~~and~~Real ~~cash~~Estate ~~flow~~Affiliates, ~~we are also working with our tenants regarding requests~~ for ~~lease~~the ~~concessions~~three ~~and~~months ~~other~~ended ~~forms~~March 31, ~~of assistance~~2021, ~~although~~our webalance ~~have~~associated ~~not~~with ~~executed~~potentially auncollectible ~~significant~~revenues ~~number~~for ofour ~~agreements.~~Unconsolidated ~~While~~Real weEstate ~~anticipate~~Affiliates ~~that~~decreased weby ~~may grant further rent concessions~~$1.6 million, ~~such~~which asincludes ~~the~~$0.7 million ~~deferral~~for orstraight-line ~~abatement of lease payments, such~~ rent ~~concession requests are evaluated on a case-by-case basis~~receivables. ~~Not~~Of ~~all~~these ~~requests~~amounts for ~~rent relief will be granted as~~ the ~~Company~~three ~~does~~months ~~not~~ended ~~intend~~March 31, to2021, ~~forgo~~our ~~its~~share ~~legally~~totaled ~~enforceable~~$0.6 million ~~contractual~~which ~~rights~~includes ~~that~~$0.3 million ~~exist~~for ~~under~~straight-line ~~its~~rent ~~lease agreements~~receivables.

With respect to our consolidated properties, for the year ended December 31, 2020, we have recorded $42.3 million, associated with potentially uncollectible revenues, which includes $5.3 million, for straight-line rent receivables. With respect to our Unconsolidated Real Estate Affiliates, for the year ended December 31, 2020, our Unconsolidated Real Estate Affiliates have recorded $68.7 million, associated with potentially uncollectible revenues, which includes $8.6 million, for straight-line rent receivables. Of these amounts for the year ended December 31, 2020, our share totaled $33.8 million, which includes $4.2 million, for straight-line rent receivables.

As of March 31, 2021, the Company, including consideration of our share of Unconsolidated Real Estate Affiliates, has collected approximately 86% of first quarter rents. While working to preserve our profitability and cash flow, we are also working with our tenants regarding requests for lease concessions and other forms of assistance. The Company continues to make meaningful progress in its negotiations with national and local tenants to secure rental payments, despite a significant portion of the Company's tenants requesting rental assistance, whether in the form of deferral or rent reduction. As of March 31, 2021, in response to the COVID-19 pandemic, the Company granted rent deferrals and rent abatements of 1% and 3% of rents, respectively. The rent abatements granted were considered lease modifications and will be recognized prospectively over the remaining lease terms from the period of the rent that was abated. While we anticipate that we may grant further rent concessions, such as the deferral or abatement of lease payments, such rent concession requests are evaluated on a case-by-case basis. Not all requests for rent relief will be granted as the Company does not intend to forgo its legally enforceable contractual rights that exist under its lease agreements.

Rental revenues also includes lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as accretion related to above-market and below-market tenant leases on acquired properties and properties that were recorded at fair value at the emergence from bankruptcy.

In leasing tenant space, we may provide funding to the lessee through a tenant allowance. To account for a tenant allowance, we determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the control and ownership of such improvements. If we are considered the owner of the leasehold improvements, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the leasehold improvements, the allowance is capitalized to deferred expenses and considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

~~Deferred expenses~~ 15

The new leasing standard defines initial direct costs as incremental costs of a lease that would not have been incurred if the lease had not been obtained. These initial direct costs (consisting primarily of leasing commissions paid to third parties) are recognized as deferred expenses on our Consolidated Balance Sheet and are amortized using the straight-line method over the life of the leases. Other leasing costs which do not meet the definition of initial direct costs (consisting primarily of internal legal and leasing overhead costs) are expensed as incurred and included in property management and other costs in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Management Fees and Other Corporate Revenues

Management fees and other corporate revenues primarily represent real estate management and leasing fees, development fees, financing fees and fees for other ancillary services performed for the benefit of certain of the Unconsolidated Real Estate Affiliates. Management fees are reported at 100% of the revenue earned from the joint venture in management fees and other corporate revenues on our Consolidated Statements of Operations and Comprehensive Income (Loss). Our share of the management fee expense incurred by the Unconsolidated Real Estate Affiliates is reported within equity in income (loss) of Unconsolidated Real Estate Affiliates on our Consolidated Statements of Operations and Comprehensive Income (Loss) and in property management and other costs in the Condensed Combined Statements of Income in Note 5. The following table summarizes the management fees from affiliates and our share of the management fee expense:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Management fees from affiliates	$	28,923	$	44,206	$	90,826	$	123,444
Management fee expense	(9,007)		(11,956)		(25,911)		(36,485)
Net management fees from affiliates	$	19,916	$	32,250	$	64,915	$	86,959

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Deferred expenses

The new leasing standard defines initial direct costs as incremental costs of a lease that would not have been incurred if the lease had not been obtained. These initial direct costs (consisting primarily of leasing commissions) are recognized as deferred expenses on our Consolidated Balance Sheet and are amortized using the straight-line method over the life of the leases. Other leasing costs which do not meet the definition of initial direct costs (consisting primarily of internal legal and leasing overhead costs) are expensed as incurred and included in property management and other costs in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Management Fees and Other Corporate Revenues


	Three Months Ended March 31,
	2021		2020
Management fees from affiliates	$	31,501	$	35,338
Management fee expense	(11,027)		(11,286)
Net management fees from affiliates	$	20,474	$	24,052

Management Fee Expense

Following the BPY Transaction of 2018, certain ~~Brookfield Asset Management Inc. ("~~BAM~~")-~~ owned entities provide certain management and administration services to BPYU. BPYU and its affiliates pay a management fee based on market capitalization and metrics defined by management. For the first twelve months following closing of the BPY Transaction of 2018, BAM agreed to waive management fees payable by BPYU. ~~Amounts~~For ~~payable for~~ the three ~~and nine~~ months ended ~~September~~March 3031, 2021 and 2020, ~~were~~respectively, the Company accrued base management fees of $4.61 million and $~~12.~~4.5 million, ~~respectively~~due to BAM; which are included in the accounts payable and accrued expenses on the Consolidated Balance Sheets and in property management and other costs on the Consolidated Statements of Operations and Comprehensive Loss.

Following the BPY Transaction of 2018, an affiliate of BAM is entitled to receive incentive distributions based on an amount by which quarterly distributions exceed specified target levels. There were no such amounts payable for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020.

Impairment

Operating Properties

We regularly review our Consolidated Properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy, debt maturities, changes in management's intent with respect to the properties and prevailing market conditions.

If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property.

Although we may market a property for sale, there can be no assurance that the transaction will be complete until the sale is finalized. However, GAAP requires us to utilize the Company's expected holding period of our properties when assessing recoverability. If we cannot recover the carrying value of these properties within the planned holding period, we will estimate the fair values of the assets and record impairment charges for properties when the estimated fair value is less than their carrying value.16

Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and construction in progress, are assessed by project and include, but are not limited to, significant changes in the Company's plans with respect to the project, significant changes in projected completion dates, tenant demand, anticipated revenues or cash flows, development costs, market factors and sustainability of development projects.

During the three months ended September 30, 2020, we recorded no impairment charges. During the nine months ended September 30, 2020, we recorded an impairment charge of $71.5 million on our Consolidated Statements of Operations and Comprehensive Income (Loss) related to a reduction in the probability-weighted holding period at one of the operating properties, where the Company is currently engaging in negotiations with the creditor to obtain potential lender concessions or other relief (see Note 5).

During the three months ended September 30, 2019, we recorded an impairment charge of $38.8 million on our Consolidated Statements of Operations and Comprehensive Income (Loss) related to one operating property where the carrying value exceeded the transfer price to our affiliate (Note 3). During the nine months ended September 30, 2019, we recorded a

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

~~$223~~future undiscounted cash flows.~~1 million~~ To the extent an impairment ~~charge~~provision onis ~~our~~determined ~~Consolidated~~to ~~Statements~~be ofnecessary, ~~Operations~~the ~~and~~excess ~~Comprehensive~~of ~~Income~~the ~~(Loss),~~carrying ~~$184.3 million~~amount of ~~which~~the ~~related~~property over its estimated fair value is expensed to ~~one~~operations. ~~operating~~In ~~property~~addition, asthe aimpairment ~~result~~provision ofis aallocated ~~significant~~proportionately ~~decrease~~to inadjust ~~market~~the ~~leasing~~carrying ~~assumptions~~amount ~~and~~of ~~$38~~the asset group.~~8 million~~ ofThe adjusted carrying amount, which ~~related~~represents tothe new cost basis of the ~~impairment~~property, ~~charge~~is ondepreciated over the ~~operating~~remaining ~~property~~useful ~~discussed~~life ~~above~~of the property.

AAlthough ~~significant~~we ~~judgment~~may ismarket ~~made~~a asproperty tofor ifsale, ~~and~~there ~~when~~can ~~impairment should~~ be ~~taken.~~no ~~The~~assurance ~~Company’s~~that ~~assessment~~the oftransaction ~~impairment~~will asbe ofcomplete ~~September 30,~~until ~~2020 was based on~~ the ~~most~~sale ~~current~~is ~~information available to the Company~~finalized. ~~Based~~However, ~~upon~~GAAP ~~current~~requires ~~market~~us ~~conditions,~~to ~~certain~~utilize of the Company’'s ~~properties~~expected ~~may~~holding ~~have~~period ~~fair~~of ~~values~~our ~~less~~properties ~~than~~when ~~their~~assessing ~~carrying amounts~~recoverability. ~~However,~~If ~~based~~we oncannot ~~the~~recover ~~Company’s plans with respect to those properties,~~ the ~~Company believes that their~~ carrying ~~amounts~~value ~~are~~of ~~recoverable~~these ~~and~~properties ~~therefore,~~within ~~under~~the ~~applicable~~planned ~~GAAP~~holding ~~guidance~~period, nowe ~~impairment~~will ~~charges~~estimate ~~were recognized. If~~ the ~~operating~~fair ~~conditions~~values ~~mentioned~~of ~~above deteriorate or if~~ the ~~Company’s~~assets ~~expected~~and ~~holding~~record ~~period~~impairment charges for ~~assets~~properties ~~change,~~when ~~subsequent~~the ~~tests~~estimated ~~for~~fair ~~impairment~~value ~~could~~is ~~result~~less inthan ~~impairment~~their ~~charges~~carrying ~~in the future~~value.

Impairment charges are recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the carrying value of a property is not recoverable and it exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and/or in the period of disposition. The Company continues to evaluate its strategies as to individual assets which could impact the evaluation and timing of when an impairment is recorded.

During the three months ended March 31, 2021,we recorded an impairment charge of $107.0 million on our Consolidated Statements of Operations and Comprehensive Loss. Specifically, $77.5 million of impairment was recognized for two operating properties where the Company’s expected holding period for the assets changed due to an increased probability of a near-term disposition and $29.5 million of impairment was recognized based on an update to the Company’s estimated probability of obtaining concessions from the creditor at an operating property for which the Company has suspended funding equity contributions to make contractual interest and/or principal payments.

During the three months ended March 31, 2020, no provisions for impairment were recognized.

A significant judgment is made as to if and when impairment should be taken. The Company’s assessment of impairment as of March 31, 2021 was based on the most current information available to the Company. Based upon current market conditions, certain of the Company’s properties may have fair values less than their carrying amounts. However, based on the Company’s plans with respect to those properties, the Company believes that their carrying amounts are recoverable and therefore, under applicable GAAP guidance, no impairment charges were recognized. If the operating conditions mentioned above deteriorate or if the Company’s expected holding period for assets change, subsequent tests for impairment could result in impairment charges in the future.

Investment in Unconsolidated Real Estate Affiliates

A series of operating losses of an investee or other factors may indicate that an other-than-temporary decline in value of our investment in an Unconsolidated Real Estate Affiliate has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we performed for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary declines with respect to the carrying values of our Unconsolidated Real Estate Affiliates. Refer to Note 5 for more information.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions and access to our credit facility. Our credit risk exposure with regard to our cash and the $1.5 billion available under our credit facility is spread among a diversified group of investment grade financial institutions. We had $~~920~~985.0 million and $~~715~~1,015.0 million outstanding under our credit facility as of ~~September~~March 3031, ~~2020~~2021 and December 31, ~~2019~~2020, respectively.

~~Severance and Other Employee Related Costs~~ 17

In accordance with ASC 712, Nonretirement Postemployment Benefits, we recognize severance costs when it becomes probable that a payment will be made and the amount is estimable. During the three and nine months ended September 30, 2020, the Company recorded $12.0 million of severance costs included in accounts payable on our Consolidated Balances Sheets and property management costs on our Consolidated Statements of Operations and Comprehensive Income (Loss), related to a workforce reduction.

Recently Issued Accounting Pronouncements

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic ("COVID-19" or "the global economic shutdown" or "the shutdown"), lessors may provide rent deferrals and other lease concessions to lessees. In April 2020, the Financial Accounting Standards Board ("FASB") staff issued a question and answer document (the "Lease Modification Q&A") focused on the application of lease accounting guidance to lease concessions provided as a result of the global economic shutdown. Under existing lease guidance, economic relief that is agreed to or negotiated outside of the original lease agreement is typically considered a lease modification, in which case both the lessee and lessor would be required to apply the respective modification frameworks. However, if the lessee was entitled to the economic relief because of either contractual or legal rights, the relief would be accounted for outside of the modification framework. Although the original lease modification guidance in ASC 842, Leases remain appropriate to address routine lease modifications, the Lease Modification Q&A established a different framework to account for certain lease concessions granted in response to the global economic shutdown. The Lease Modification Q&A allows the Company, if certain criteria have been met, to make an accounting policy election to account for COVID-19 related lease concessions as either a lease modification or a negative variable adjustment to rental revenue. Such election is required to be applied consistently to leases with similar characteristics and similar circumstances.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Recently Issued Accounting Pronouncements

The Company has elected to apply such relief and will avail itself of the election to treat leases as lease modifications, thereby avoiding performing a lease by lease analysis for the lease concessions that were (1) granted as relief due to the shutdown and (2) result in the cash flows remaining substantially the same or less than the original contract. The adoption of this standard did not materially impact the Company's consolidated financial statements.

In ~~June~~March ~~2016~~2020, the FASB issued ASU ~~2016~~2020-1304, ~~Financial~~Reference ~~Instruments~~Rate -Reform. ~~Credit~~This ~~Losses~~temporary ~~(Topic~~guidance ~~326:~~is ~~Measurement~~effective as of ~~Credit~~March ~~Losses on Financial Instruments)~~12, ~~which~~2020 ~~changes~~through ~~the~~December ~~model~~31, ~~for~~2022 ~~the~~to ~~measurement~~ease ofpotential ~~credit~~burdens ~~losses~~related onto ~~financial~~the ~~instruments.~~accounting ~~Specifically~~for, ~~the~~or ~~amendments~~recognizing in the ~~ASU~~effects ~~replace~~of, ~~the~~reference ~~incurred~~rate ~~loss~~reform ~~impairment~~on ~~methodology~~financial inreporting. ~~current~~The ~~GAAP~~guidance ~~with~~provides aoptional ~~methodology~~expedients ~~that~~for ~~reflects~~applying ~~expected~~existing ~~credit~~GAAP ~~losses~~to ~~and~~contract ~~requires~~modifications ~~consideration of a broader range of reasonable~~ and ~~supportable~~hedging ~~information~~relationships toaffected ~~inform~~by ~~credit~~the ~~loss~~move ~~estimates.~~of Inglobal ~~November~~capital ~~2018,~~markets ~~the~~away ~~FASB~~from ~~issued~~interbank ~~ASU~~offered ~~2018-19~~rates, ~~Codification~~most ~~Improvements~~notably tothe ~~Topic~~London ~~326,~~Interbank ~~Financial~~Offered ~~Instruments~~Rate -(LIBOR). ~~Credit~~The ~~Losses,~~Company ~~which~~has ~~clarifies~~not ~~that~~adopted ~~receivables~~any ~~arising~~of ~~from~~the ~~operating~~optional ~~leases~~expedients ~~are~~or ~~not~~exceptions ~~within~~as ~~the~~of ~~scope~~March 31, of2021, ~~this~~but ~~new~~will ~~guidance.~~continue ~~The~~to ~~Company~~evaluate ~~adopted~~the ~~this~~possible ~~standard~~adoption onof ~~January~~any 1,such ~~2020~~expedients ~~which~~or ~~did~~exceptions ~~not~~during ~~materially~~the ~~impact~~effective ~~its~~period ~~consolidated~~as ~~financial~~circumstances ~~statements~~evolve.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement. Public entities will be required to disclose the following: (i) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. In addition, public entities will no longer be required to disclose the following: (i) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) the policy for timing of transfers between levels and (iii) the valuation processes for Level 3 fair value measurements. The new pronouncement also clarifies and modifies certain existing provisions, including eliminating "at a minimum" from the phrase "an entity shall disclose at a minimum" to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and clarifying that materiality is an appropriate consideration when evaluating disclosure requirements. The Company adopted this standard on January 1, 2020 which did not materially impact its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform. This temporary guidance is effective as of March 12, 2020 through December 31, 2022 to ease potential burdens related to the accounting for, or recognizing the effects of, reference rate reform on financial reporting. The guidance provides optional expedients for applying existing GAAP to contract modifications and hedging relationships affected by the move of global capital markets away from interbank offered rates, most notably the London Interbank Offered Rate (LIBOR). The Company has not adopted any of the optional expedients or exceptions as of September 30, 2020, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. For example, estimates and assumptions have been made with respect to allocating the purchase price of real estate acquisitions, the useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables and deferred taxes, provision for loan loss, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets, litigation related accruals and disclosures and fair value of debt. Actual results could differ from these and other estimates.

NOTE 3 ACQUISITIONS, SALES AND JOINT VENTURE ACTIVITY

OnDuring ~~September~~the 3three months ended March 31, ~~2020~~2021, BPR Cumulus LLC (an indirect subsidiary of the Company) ~~transferred~~purchased ~~its~~an ~~right~~additional 1,118,060 shares of Class A Units in ~~the~~PFC ~~Sears~~Associates ~~Anchor~~LLC ~~Parcel~~(P.F. atChang's) ~~The~~(par ~~Mall~~value in$0.01 ~~Columbia~~per toshare) ~~TMIC~~at FSa ~~Anchor~~price ~~Parcel~~of ~~LLC~~$1.00 per share, for a ~~subsidiary~~$1.1 million ofadditional ~~Mall~~investment inand ~~Columbia~~a JVtotal ~~LLC~~investment of $11.5 million. InP.F. ~~connection~~Chang's ~~with~~is a tenant at certain properties for which we receive rental income included in rental revenues on the ~~formation~~Consolidated Statements of ~~the~~Operations ~~Mall~~and inComprehensive ~~Columbia~~Loss. JVThe ~~LLC~~investment ~~joint~~is ~~venture,~~accounted for using the cost method as the Company ~~agreed~~has toneither ~~use~~control ~~reasonable~~nor ~~efforts~~significant toinfluence ~~transfer~~over ~~its~~P.F. ~~legal~~Chang's ~~rights~~and atis anincluded ~~agreed~~in ~~upon~~Investment ~~value~~in ofUnconsolidated ~~$45~~Real Estate Affiliates on the Consolidated Balance Sheets.~~5 million.~~

OnAs ~~May~~of 27January 1, ~~2020~~2021, the Company ~~completed~~conveyed aNorth ~~restructuring~~Point ~~with~~Mall ~~respect~~ to ~~Water~~the ~~Tower~~property's ~~Place~~lender ~~with~~in ~~its~~satisfaction ~~joint~~of ~~venture~~$247.0 million ~~partner~~in ~~for~~outstanding ~~nominal~~debt. ~~consideration~~Accordingly, ~~and~~the ~~assumption~~Company recognized a gain of ~~the~~$13.1 million ~~partner’s~~and ~~share~~$1.8 million ofincluded ~~the~~in gain on extinguishment of debt, ~~resulting~~and ingain ~~the~~on ~~Company~~changes ~~obtaining~~in control of ~~the~~investment ~~entity~~properties, ~~with~~respectively aon ~~total~~our ~~ownership~~Consolidated ~~percentage~~Statements ~~for~~of ~~the~~Operations ~~Company~~and ofComprehensive ~~93.93%.~~Loss ~~Accordingly,~~for the ~~Company~~three ~~recognized~~months aended ~~loss~~March of31, 2021.

2018

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

As of January 1, 2021, the Company conveyed Florence Mall to the property's lender in satisfaction of $1590.0 million in outstanding debt. Accordingly, the Company recognized a loss of $4.2 million included in ~~loss~~Unconsolidated ~~from~~Real ~~changes~~Estate inAffiliates ~~control~~- ofgain (loss) on investment, ~~properties~~net on ~~the~~our Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021.

On March 11, 2020, BPR Nimbus LLC (an indirect subsidiary of the Company) purchased 690,427 shares of Series B Convertible Preferred Stock in Camp NYC, Inc. (par value $0.01 per share) at a price of approximately of $7.24 per share, for a $5.0 million total investment, resulting in a 5.5% ownership interest in Camp NYC, Inc. The investment is accounted for using the cost method (adjusted for impairment and observable price changes) as the Company has neither control nor significant influence over Camp NYC, Inc. and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On February 21, 2020, the Company completed the sale of eight outparcels for a gross sales price of $12.1 million, which resulted in a gain of $7.8 million included in Other Revenues on the Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) for the ~~nine~~three months ended ~~September~~March 3031, 2020. All of the eight outparcels were located at consolidated entities.

On February 7, 2020, our joint venture partner at the SoNo Collection contributed $70.8 million in additional capital to the joint venture, resulting in a dilution of the Company’s ownership interest from 17.0% to 12.9%.

On January 14, 2020, BPR Cumulus LLC (an indirect subsidiary of the Company) purchased 758,725 shares of Common Stock in Allied Esports Entertainment, Inc. (par value $0.01 per share) at a price of $6.59 per share, for a $5.0 million total investment. The investment was marked to fair value as of ~~September 30~~March 31, ~~2020~~2021, which resulted in a ~~loss~~gain of $01.60 million and a loss of $43.08 million included in Unconsolidated Real Estate Affiliates - (loss) gain on investment, net on the Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) for the three ~~and nine~~ months ended ~~September~~March 3031, 2021 and 2020, respectively. This investment resulted in a 3.2% ownership interest in Allied Esports Entertainment, Inc. The investment is accounted for at fair value as the Company has neither control nor significant influence over Allied Esports Entertainment, Inc. and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On January 9, 2020, the Company completed the sale of its 27.0% interest in Aero OpCo LLC ("Aeropostale") for a gross sales price of $36.0 million, which resulted in a gain on the sale of $15.1 million included in Unconsolidated Real Estate Affiliates - (loss) gain on investment, net on the Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) for the ~~nine~~three months ended ~~September~~March 3031, 2020.

On January 9, 2020, the Company completed the sale of its 1.2% interest in Authentic Brands Group LLC ("ABG") for a gross sales price of $33.5 million, which resulted in a gain on the sale of $1.4 million included in Unconsolidated Real Estate Affiliates - (loss) gain on investment, net on the Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) for the ~~nine~~three months ended ~~September~~March 3031, 2020.

On September 13, 2019, BPR Cumulus LLC (an indirect subsidiary of the Company) purchased 10,000,000 shares of Class A Units in PFC Associates LLC ("P.F. Chang's") (par value $0.01 per share) at a price of $1.00 per share, for a $10.0 million total investment, resulting in a 3.2% ownership interest in P.F. Chang's. P.F. Chang's is a tenant at certain properties for which we receive rental income included in rental revenues on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine months ended September 30, 2019. The investment is accounted for using the cost method as the Company has neither control nor significant influence over P.F. Chang's and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On August 26, 2019, the Company purchased an additional ownership interest of 49.677% in 730 Fifth Owners, LLC from its joint venture partner resulting in the Company obtaining control of the entity with a total ownership percentage for the Company of 99.677%. The transaction was accounted for as an asset acquisition. The transaction consideration consisted of cash consideration of $153.0 million and satisfaction of notes receivable of $249.5 million from the joint venture partner. Because of the presence of non-cash consideration, the Company determined that the fair value of the net assets acquired was more readily determinable than the fair value of the consideration given, and determined that the aggregate fair value of the joint venture's equity was $808.0 million on the acquisition date, which was allocated to the Company's 99.677% ownership interest for $805.4 million and the joint venture partner's remaining 0.323% non-controlling interest for $2.6 million. Concurrent with this transaction, the joint venture partner repaid $54.7 million of interest on the notes receivable (including amounts that had been annually capitalized onto the outstanding principal balance). The Company recorded a gain on change in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

control of investment properties of $39.7 million related to the Company's previously held 50% ownership interest. Immediately following this transaction, the Company sold a condominium interest in one unit of the property to an affiliate of the joint venture partner for a gross sales price of $12.6 million to an affiliate of the joint venture partner, and incurred fees of $0.4 million, which resulted in no gain or loss, as the fair value of the condominium interest in the consolidation transaction had been determined to be $12.2 million.

The table below summarizes the gain from changes in control of investment properties ($ in millions):

Fair value of Investment in Unconsolidated Real Estate Affiliates as of change in control	$	404.0
Less: carrying value of Investment in Unconsolidated Real Estate Affiliates	364.3
Gain from changes in control of investment properties and other, net	$	39.7

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

Investment in real estate, including intangible assets and liabilities	$	1,560.5
Debt held by the joint venture	(720.0)
Net working capital	(32.5)
Net assets acquired	$	808.0

On August 19, 2019, the Company sold the SoNo Collection to a newly formed joint venture owned 80.5% by an affiliated fund (which is a related party of the Company) and 19.5% by the Company. The property was contributed to the joint venture at a value of $419.3 million based on project-specific cash costs. This excludes additional costs to complete the project by the joint venture. Prior to obtaining project-specific financing on August 9, 2019, the Company was required under GAAP to capitalize interest on general corporate financings into the cost basis of the project, which resulted in a $38.8 million impairment due to the difference between the project’s GAAP basis and the sale price based upon total project-specific cash costs. Following the transaction, the Company accounts for its non-controlling investment in the SoNo Collection under the equity method of accounting as the Company can exercise significant influence but not control over the joint venture.

On August 12, 2019, the Company completed the sale of the land in the former Sears Anchor Parcel at Columbia Mall for a gross sales price of $5.0 million, which resulted in a gain on the sale of $3.6 million included in other revenues on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2019.

On August 9, 2019, the Company completed the sale of 49.3% of its interest in Authentic Brands Group LLC ("ABG") for a gross sales price of $32.1 million, which resulted in a gain on the sale of $16.8 million included in Unconsolidated Real Estate Affiliates - Gain on Investment on the Consolidated Statements Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2019. The basis of the remaining 50.7% investment was marked to fair value of $32.1 million in conjunction with the sale transaction noted above, which resulted in an additional gain on sale of $16.8 million directly related to the step up basis in fair value. This gain is recorded in Unconsolidated Real Estate Affiliates - Gain on Investment on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2019. The investment will continue to be accounted for using the cost method as the Company has neither control nor significant influence over ABG and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On July 26, 2019, the Company purchased 2,255,503 shares of Series D Preferred Units in Industrious National Management Company LLC at a price of $2.22 per share, for a $5.0 million total investment, resulting in a less than 2.0% ownership interest in Industrious National Management Company LLC. The investment is accounted for using the cost method as the Company has neither control nor significant influence over Industrious National Management Company LLC and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

On April 19, 2019, BPR Cumulus LLC (an indirect subsidiary of the Company) purchased 1,250,000 shares of Series F Convertible Preferred Stock in Pinstripes, Inc. (par value $0.01 per share) at a price of $8.00 per share, for a $10.0 million total investment, resulting in a 7.6% ownership interest in Pinstripes, Inc. The investment is accounted for using the cost method as the Company has neither control nor significant influence over Pinstripes, Inc. and is included in Investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

In connection with the formation of the BPR-FF JV LLC joint venture, the Company agreed to use reasonable efforts to cause a transfer to BPRFF JV LLC of the legal rights it held in the Seritage Venture at Coronado Center Mall at an agreed upon value of $53.1 million. On April 9, 2019, the Company transferred its rights in the Sears Anchor Parcel at Coronado Center Mall to Coronado Center LLC. No gain or loss was recognized on the transaction.

On January 7, 2019, the Company completed the sale of its 12.0% interest in Bayside Marketplace for a sales price of $42.0 million. Due to cumulative distributions received in excess of its investment, the Company had a liability balance associated with its investment in Bayside Marketplace. Accordingly, the Company recognized a gain of $104.4 million included in Unconsolidated Real Estate Affiliates - (loss) gain on investment, net on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine months ended September 30, 2019.

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 three months ended September 30, 2020, we recognized no impairment charges. During the nine months ended September 30, 2020, we recognized $71.5 million in impairment charges. During the three and nine months ended September 30, 2019, we recognized $38.8 million and $223.1 million in impairment charges, respectively.19

	Total Fair Value Measurement		Quoted Prices inActive Marketsfor Identical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservable Inputs(Level 3)		Provisions for Impairment
Nine months ended September 30, 2020
Investments in real estate (1)	$	86,337	$	—	$	—	$	86,337	$	71,455
Three months ended September 30, 2019
Investments in real estate (1)	$	419,327	$	—	$	—	$	419,327	$	38,794
Nine months ended September 30, 2019
Investments in real estate (1)	$	599,721	$	—	$	—	$	599,721	$	223,142

(1) The impairment recorded on the Investments in real estate balance represents a loss incurred at a consolidated property. Refer to Note 5 for information regarding the impairment losses recorded on our Unconsolidated Real Estate Affiliates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Unobservable Quantitative Input						Rate
Nine months ended September 30, 2020
Discount rate						10.75%
Terminal capitalization rate						9.50%
Three months ended September 30, 2019
Agreed upon purchase price						N/A
Nine months ended September 30, 2019
Discount rates						5.50%
Terminal capitalization rate						4.00%

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 three months ended March 31, 2021, we recognized $107.0 million in impairment charges. There were no impairment charges recorded during the three months ended March 31, 2020.


	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


Three months ended March 31, 2021
Investments in real estate (1)	$	117,411	$	—	$	38,000	$	79,411	$	106,991
Three months ended March 31, 2020
Investments in real estate (1)	$	—	$	—	$	—	$	—	$	—


Unobservable Quantitative Input						Rate
Three months ended March 31, 2021
Discount rate						14.00%
Terminal capitalization rate						9.50%


Three months ended March 31, 2020
Discount rates						N/A
Terminal capitalization rate						N/A

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 ~~September~~March 3031, ~~2020~~2021 and December 31, ~~2019~~2020.

September 30, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Carrying Amount (1)

Estimated FairValue

Carrying Amount (2)

Estimated FairValue

Fixed-rate debt

8,~~854~~558,~~870~~327

8,~~813~~516,~~125~~331

8,~~627~~581,~~332~~538

8,~~631~~556,~~704~~275

Variable-rate debt

7,~~475~~491,~~259~~360

7,~~527~~543,~~617~~802

7,~~275~~533,~~562~~048

7,~~355~~583,~~744~~107

16,~~330~~049,~~129~~687

16,~~340~~060,~~742~~133

1516,~~902~~114,~~894~~586

1516,~~987~~139,~~448~~382

(1) Includes net market rate adjustments of $32.57 million and deferred financing costs of $~~113~~96.38 million, net.

(2) Includes net market rate adjustments of $43.72 million and deferred financing costs of $~~131~~105.89 million, net.

The fair value of our junior subordinated notes approximates their carrying amount as of ~~September~~March 3031, ~~2020~~2021 and December 31, ~~2019~~2020. We estimated the fair value of mortgages, notes and other loans payable using Level 2 and Level 3 inputs based on recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current LIBOR, U.S. treasury obligation interest rates and on the discounted estimated future cash payments to be made on such debt. 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 market information as available or present value techniques to estimate the 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.

2420

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

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. The reconciliation to our total investment in Unconsolidated Real Estate Affiliates is inclusive of investments accounted for using the cost method (adjusted for impairment and observable price changes) (Note 2).

	September 30, 2020		December 31, 2019
	March 31, 2021		December 31, 2020
Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates
Assets:
Land	$	3,~~470~~432,~~227~~054	$	3,~~458~~436,~~485~~531
Buildings and equipment	21,~~973~~814,~~927~~067		2221,~~119~~861,~~745~~373
Less accumulated depreciation	(4,~~525~~749,~~417~~001)		(4,~~303~~584,~~109~~222)
Construction in progress	~~411~~383,~~147~~079		~~657~~360,~~170~~681
Net investment in real estate	2120,~~329~~880,~~884~~199		21,~~932~~074,~~291~~363
Cash and cash equivalents	~~548~~594,~~509~~774		~~662~~601,~~879~~138
Accounts receivable, net	~~737~~605,~~208~~614		~~344~~684,~~946~~035
Notes receivable	20,~~648~~637		2220,~~497~~490
Deferred expenses, net	~~397~~376,~~361~~640		~~428~~387,~~460~~073
Prepaid expenses and other assets	~~551~~581,~~389~~907		~~692~~592,~~407~~288
Total assets	$	23,~~584~~059,~~999~~771	$	2423,~~083~~359,~~480~~387
Liabilities and Owners' Equity:	\
Mortgages, notes and loans payable	$	14,~~757~~552,~~099~~203	$	1514,~~173~~648,~~099~~187
Accounts payable, accrued expenses, and other liabilities	~~946~~978,~~378~~257		1996,~~079,915~~380
Cumulative effect of foreign currency translation ("CFCT")	(33,~~230~~821)		(929,~~985~~453)
Owners' equity, excluding CFCT	7,~~914~~563,~~752~~132		7,~~840~~744,~~451~~273
Total liabilities and owners' equity	$	23,~~584~~059,~~999~~771	$	2423,~~083~~359,~~480~~387
Investment in Unconsolidated Real Estate Affiliates, Net:
Owners' equity	$	7,~~881~~529,~~522~~311	$	7,~~830~~714,~~466~~820
Less: joint venture partners' equity	(4,~~414~~230,~~973~~516)		(4,~~357~~317,~~244~~525)
Plus: excess investment/basis differences	~~829~~769,~~842~~130		~~954~~761,~~262~~503
Investment in Unconsolidated Real Estate Affiliates, net (equity method)	4,~~296~~067,~~391~~925		4,~~427~~158,~~484~~798
Investment in Unconsolidated Real Estate Affiliates, net (securities)	3435,~~405~~206		5733,~~061~~102
Retail investment, net	—		24,182
Investment in Unconsolidated Real Estate Affiliates, net	$	4,103,131	$	4,191,900
Investment in Unconsolidated Real Estate Affiliates, net	$	4,330,796	$	4,508,727
Reconciliation - Investment in Unconsolidated Real Estate Affiliates:
Asset - Investment in Unconsolidated Real Estate Affiliates	$	4,~~461~~256,~~997~~378	$	4,~~634~~342,~~292~~995
Liability - Investment in Unconsolidated Real Estate Affiliates	(~~131~~153,~~201~~247)		(~~125~~151,~~565~~095)
Investment in Unconsolidated Real Estate Affiliates, net	$	4,~~330~~103,~~796~~131	$	4,~~508~~191,~~727~~900

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2020		2019		2020		2019
	2021		2020
Condensed Combined Statements of Income (Loss) - Unconsolidated Real Estate Affiliates
Condensed Combined Statements of Loss - Unconsolidated Real Estate Affiliates
Revenues:
Rental revenues, net	$	~~463~~462,~~181~~366	$	~~622~~550,~~704~~595	$	~~1,507,450~~	$	~~1,885,482~~
Condominium sales	—		916,~~390~~215		~~16,215~~		~~9,390~~
Other	69,~~695~~816		5118,~~224~~144		~~32,650~~		~~85,059~~
Total revenues	~~469~~472,~~876~~182		~~683~~584,~~318~~954		~~1,556,315~~		~~1,979,931~~
Operating Expenses:
Real estate taxes	5150,~~806~~005		6158,~~633~~359		~~162,846~~		~~184,215~~
Property maintenance costs	912,~~668~~530		1112,~~886~~930		~~33,326~~		~~40,026~~
Marketing	35,~~810~~196		46,~~111~~326		~~12,923~~		~~13,930~~
Other property operating costs	7268,~~908~~883		8775,~~034~~983		~~208,412~~		~~249,925~~
Condominium cost of sales	6—		69,~~844~~918		~~9,930~~		~~6,844~~
Property management and other costs (1)	2025,~~780~~995		2725,~~645~~509		~~59,973~~		~~83,649~~
General and administrative	~~183~~783		~~1,309~~408		~~1,153~~		~~3,440~~
Provision for impairment	46,~~939~~677		—		~~88,856~~		—
Depreciation and amortization	~~228~~210,~~222~~707		~~254~~230,~~413~~394		~~680,430~~		~~780,729~~
Total operating expenses	~~392~~380,~~322~~776		~~454~~419,~~875~~827		~~1,257,849~~		~~1,362,758~~
Interest income	~~372~~251		32,~~288~~551		~~4,087~~		~~8,783~~
Interest expense	(~~161~~165,~~672~~832)		(~~188~~169,~~722~~817)		~~(495,283)~~		~~(538,394)~~
Provision for income taxes	(~~640~~299)		(~~354~~503)		~~(1,471)~~		~~(743)~~
Equity in loss of unconsolidated joint ventures	—		(6,254)		—		(23,498)
Loss from continuing operations	(74,474)		(2,642)
Income (loss) from continuing operations	(84,386)		36,401		(194,201)		63,321
Allocation to noncontrolling interests	148		(12)
Allocation to noncontrolling interests	(2)		(13)		(26)		(40)
Net loss attributable to the ventures	$	(74,326)	$	(2,654)
Net income (loss) attributable to the ventures	$	(84,388)	$	36,388	$	(194,227)	$	63,281
Equity In Loss of Unconsolidated Real Estate Affiliates:
Equity In Income (Loss) of Unconsolidated Real Estate Affiliates:
Net loss attributable to the ventures	$	(74,326)	$	(2,654)
Net income (loss) attributable to the ventures	$	(84,388)	$	36,388	$	(194,227)	$	63,281
Joint venture partners' share of loss	42,295		3,798
Joint venture partners' share of (income) loss	45,615		(15,576)		108,146		(28,202)
Amortization of capital or basis differences	(2,422)		(5,987)
Gain on retail investment	—		5,785		—		1,249
Equity in loss of Unconsolidated Real Estate Affiliates	$	(34,453)	$	(4,843)
Amortization of capital or basis differences	(5,382)		(10,452)		(19,343)		(35,894)
Equity in loss of Unconsolidated Real Estate Affiliates	$	(44,155)	$	16,145	$	(105,424)	$	434

(1) Includes management fees charged to the unconsolidated joint ventures by BPRRS and BPRI.

The Unconsolidated Real Estate Affiliates represent our investments in real estate joint ventures that are not consolidated. We hold interests in 2523 domestic joint ventures, comprising 5957 U.S. retail properties and one joint venture in Brazil, which was sold subsequent to March 31, 2021 (Note 18). 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 (adjusted for impairment and observable price changes). 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.

26As of March 31, 2021, the balance of ROU assets was $67.4 million, net and lease liabilities of $69.6 million for 24 ground leases in the Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates under Topic 842, included in prepaid

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

(Unaudited)

As of September 30, 2020, the balance of ROU assets was $68.1 million, net and lease liabilities of $70.1 million for 24 ground leases in the Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates under Topic 842, included in prepaid expenses and other assets and accounts payable, accrued expenses, and other liabilities, respectively. As of December 31, ~~2019~~2020, the balance of ROU assets was $6867.9 7 million, net and lease liabilities was $7169.0 9 million for 24 ground leases in the Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates under Topic 842, included in prepaid expenses and other assets and accounts payable, accrued expenses, and other liabilities, respectively. All of these leases are operating leases; we do not have any finance leases.

OnDuring ~~May 27, 2020,~~ the ~~Company~~three ~~acquired~~months anended ~~additional~~March 31, ~~ownership~~2021, ~~interest~~we ofrecorded 49$6.5%7 million inof ~~the~~impairment ~~Water~~charges ~~Tower~~on ~~Joint~~our ~~Venture~~Condensed ~~from~~Combined ~~its~~Statements ~~joint~~of ~~venture~~Income ~~partner~~(Loss) ~~for~~- ~~nominal~~Unconsolidated ~~consideration.~~Real ~~Following~~Estate ~~this,~~Affiliates ~~the~~related ~~Company~~to ~~has~~one aoperating 93property.~~93%~~ ~~ownership~~During ~~interest~~the inthree ~~the~~months ~~joint~~ended ~~venture~~March 31, ~~and~~2020, ~~its~~no ~~wholly~~provisions ~~owned~~for ~~subsidiary~~impairment were recognized.

During the three and nine months ended September 30, 2020, we recorded $4.9 million and $88.9 million, respectively, of impairment charges on our Condensed Combined Statements of Income (Loss) - Unconsolidated Real Estate Affiliates related to three operating properties.

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 $76.09 billion as of ~~September~~March 3031, ~~2020~~2021 and $76.29 billion as of December 31, ~~2019~~2020, 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.

As of January 1, 2021, the Company conveyed Florence Mall to the lender in satisfaction of $90.0 million in outstanding debt. Accordingly, the Company recognized a loss of $4.2 million included in Unconsolidated Real Estate Affiliates - gain (loss) on investment, net on our Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021.

On February 28, 2020, the Company closed a new loan at the Miami Design District joint venture in the amount of $500.0 million with an interest rate of 4.13%, which matures on March 1, 2030. The loan replaced the previous debt of $480.0 million with an interest rate of LIBOR plus 2.50% that was scheduled to mature on May 14, 2021. As a result of the refinancing, the joint venture incurred $3.7 million of deferred financing costs that were capitalized.

During the ~~nine~~three months ended ~~September~~March 3031, 2021, the Company suspended equity contributions to make contractual interest and/or principal payments on six property level mortgages. During the year ended December 31, 2020, the Company suspended equity contributions to make contractual interest and/or principal payments on eight property level mortgages. The Company is currently engaging in negotiations with the creditors on these mortgages to obtain potential lender concessions or other relief. If the Company is unsuccessful in obtaining concessions from these creditors, it is possible that the property securing these loans would be transferred to the lenders. In such circumstances, the carrying value of the property may no longer be recoverable and may trigger an impairment charge. These mortgages are non-recourse and the creditors do not have security claims against the Company aside from the collateral property. InDuring ~~total~~the atthree ~~share,~~months asended ~~of September~~March 3031, ~~2020~~2021, the Company ~~has~~accrued ~~suspended~~$8.4 million ~~equity~~of ~~contributions~~default interest related to ~~make~~these mortgages per contractual ~~interest~~debt ~~and/or~~agreements. ~~principal~~As ~~payments~~of onDecember 31, a2020, ~~total~~the ofCompany had accrued $~~560~~26.98 million of ~~property~~default ~~level~~interest ~~mortgages and the~~ related ~~Investment~~to ~~in Real Estate securing~~ these ~~loans~~mortgages ~~has~~per acontractual ~~carrying~~debt ~~value of $548~~agreements.~~1 million.~~

WeIn ~~have~~total ~~debt~~at ~~obligations in excess of our pro rata~~ share, of the ~~debt~~Company ~~for~~suspended ~~one~~equity ofcontributions ~~our~~to ~~Unconsolidated~~make ~~Real~~contractual ~~Estate~~interest ~~Affiliates~~and/or ~~("Retained~~principal ~~Debt").~~payments ~~This~~on 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~~total ~~in our investment in Unconsolidated Real Estate Affiliates. We had Retained Debt~~ of $80484.2 1 million atof ~~one~~ property aslevel ofmortgages ~~September 30, 2020,~~ and ~~$81.5~~the ~~million~~related asInvestment ~~of December 31, 2019. 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 interest in or our distributions from such Unconsolidated~~ Real Estate ~~Affiliates~~securing ~~could~~these beloans ~~reduced~~has toa ~~the~~carrying ~~extent~~value of ~~such deficiencies~~$451. ~~As of September~~2 ~~30, 2020, we do not anticipate an inability to perform on our obligations with respect to Retained Debt~~million.

27We 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 $79.9 million at one property as of March 31, 2021, and $79.7 million as of December 31, 2020. 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 interest in or our distributions from such Unconsolidated Real Estate Affiliates could be reduced to the extent of such deficiencies. As of March 31, 2021, we do not anticipate an inability to perform on our obligations with respect to Retained Debt.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 6 MORTGAGES, NOTES AND LOANS PAYABLE

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

	September 30, 2020 (1)		Weighted-AverageInterest Rate (2)		December 31, 2019 (3)		Weighted-AverageInterest Rate (2)
	March 31, 2021 (1)		Weighted-AverageInterest Rate (2)		December 31, 2020 (3)		Weighted-AverageInterest Rate (2)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	7,~~923~~625,~~131~~076	4.2120	%	$	7,~~638~~649,~~697~~040	4.2119	%
Senior secured notes - silver bonds	~~931~~933,~~739~~251		5.75	%	~~988~~932,~~635~~498		5.75	%
Total fixed-rate debt	8,~~854~~558,~~870~~327		4.37	%	8,~~627~~581,~~332~~538		4.3936	%
Variable-rate debt:
Collateralized mortgages, notes and loans payable (4)	2,~~565~~527,~~216~~295		3.2584	%	2,~~594~~534,~~182~~781		4.2001	%
Unsecured corporate debt (5)	4,~~910~~964,~~043~~065		2.8176	%	4,~~681~~998,~~380~~267		42.1680	%
Total variable-rate debt	7,~~475~~491,~~259~~360		23.9612	%	7,~~275~~533,~~562~~048		43.1721	%
Total Mortgages, notes and loans payable	$	16,~~330~~049,~~129~~687	3.7279	%	$	1516,~~902~~114,~~894~~586	43.2982	%
Junior subordinated notes	$	206,200	1.7266	%	$	206,200	31.3966	%

(1) Includes $32.57 million of market rate adjustments and $~~113~~96.38 million of deferred financing costs, net.

(2) Represents the weighted-average interest rates on our principal balances, excluding the effects of market rate adjustments and deferred financing costs.

(3) Includes $43.72 million of market rate adjustments and $~~131~~105.89 million of deferred financing costs, net.

(4) $1.3 billion of the variable-rate balance is cross-collateralized.

(5) Includes deferred financing costs, which are shown as a reduction to the debt balance. See table below for the balance excluding deferred financing costs.

Collateralized Mortgages, Loan Extension, Notes and Loans Payable

As of ~~September~~March 3031, ~~2020~~2021, $15.83 billion of land, buildings and equipment (before accumulated depreciation) and construction in progress have been pledged as collateral for our mortgages, notes and loans payable. Certain of these consolidated secured loans, representing $1.3 billion of debt, are cross-collateralized. Although a majority of the $10.52 billion of fixed and variable rate collateralized mortgages, notes and loans payable are non-recourse, $~~726~~707.67 million of such mortgages, notes and loans payable are recourse to the Company as guarantees on secured financings. In addition, certain mortgage loans contain other credit enhancement provisions which have been provided by BPYU. 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 ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, the Company suspended equity contributions to make contractual interest and/or principal payments on ~~ten~~seven consolidated property level mortgages, including one mortgage that is in maturity default. During the year ended December 31, 2020, the Company suspended equity contributions to make contractual interest and/or principal payments on ten property level mortgages. The Company is currently engaging in negotiations with the creditors on these mortgages to obtain potential lender concessions or other relief. If the Company is unsuccessful in obtaining concessions from these creditors, it is possible that the property securing these loans would be transferred to the lenders. In such circumstances, the carrying value of the property may no longer be recoverable and may trigger an impairment charge. These mortgages are non-recourse and the creditors do not have security claims against the Company aside from the collateral property. InDuring ~~total,~~the asthree ofmonths ~~September~~ended March 3031, ~~2020~~2021, the Company ~~has~~accrued ~~suspended~~$4.8 million ~~equity~~of ~~contributions~~default tointerest ~~make~~related ~~contractual~~to ~~interest~~these ~~and/or~~mortgages ~~principal~~per ~~payments~~contractual ondebt aagreements. ~~total~~As of ~~$1.3~~December ~~billion~~31, of2020, ~~consolidated~~the ~~property~~Company ~~level~~had ~~mortgages~~accrued ~~and~~$19.8 million ~~the~~of ~~related~~default ~~Investment~~interest inrelated ~~Real~~to ~~Estate securing~~ these ~~loans~~mortgages ~~has~~per acontractual ~~carrying~~debt ~~value of $1~~agreements.~~4 billion.~~

OnAs ~~April~~of 24March 31, ~~2020~~2021, the Company ~~completed~~suspended aequity ~~one-year~~contributions ~~extension~~to ofmake acontractual ~~$1.3~~interest ~~billion~~and/or ~~loan~~principal ~~secured~~payments byon ~~cross-collateralized~~a ~~mortgages~~total onof 15$723.8 million ~~properties~~of ~~with~~consolidated anproperty ~~interest~~level ~~rate~~mortgages ofand ~~LIBOR~~the ~~plus~~related ~~1.75%,~~investment ~~which~~in ~~matures~~real onestate ~~April~~securing ~~25,~~these ~~2021.~~loans Anhas ~~extension~~a ~~fee~~carrying value of $1697.64 million ~~was paid in conjunction with the extension~~.

2824

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

~~During~~As of January 1, 2021, the ~~year~~Company ~~ended~~conveyed ~~December~~North Point Mall to the property's lender in satisfaction of $247.0 ~~31,~~million ~~2019~~in outstanding debt. Accordingly, the Company ~~completed~~recognized a gain of $13.1 million and $1.8 million included in gain on extinguishment of debt and gain on changes in control of investment properties, respectively on our Consolidated Statements of Operations and Comprehensive Loss for the ~~following~~three ~~transactions:~~months ended March 31, 2021.

~~•New~~During ~~loan at Shops at Merrick Park in~~ the ~~amount~~year ofended ~~$390.0 million with an interest rate of 3.90% which matures on November 1~~December 31, ~~2024. The loan replaced previous debt of $161.0 million with an interest rate of 5.73% that was scheduled to mature on April 1~~2020, ~~2021. In connection with~~ the ~~refinancing, the~~ Company ~~incurred~~completed ~~prepayment penalties of $7.9 million. As~~ the ~~refinancing~~following ~~plan~~transactions: ~~was contemplated in connection with the acquisition of the property, such fees were factored in to the fair value of debt recognized on the consolidation date.~~

•~~New~~Three-year ~~loans~~extension atof ~~Park Meadows in~~ the ~~amount~~indebtedness ~~of $700.0 million which mature~~ on ~~November~~Fox 1,River ~~2024.~~Mall ~~These loans consist of a senior loan~~ in ~~the~~ amount of $~~615~~187.0 million with ~~an interest rate of 3.18% and~~ a ~~mezzanine~~maturity ~~loan~~date ~~in the amount~~ of ~~$85.0~~June ~~million with an interest rate of 6.25%. These loans replaced previous debt of $360.0 million with an interest rate of 4.6% that was scheduled to mature on December~~ 1, ~~2023~~2024. InThe ~~connection~~transaction ~~with~~incurred ~~the~~fees ~~refinancing,~~in the ~~Company~~amount ~~incurred prepayment penalties~~ of $353.6 1 million~~. As the refinancing plan was contemplated in connection with the acquisition of the property~~, ~~such~~due ~~fees were factored in to the fair value of debt recognized~~ on ~~the~~December ~~consolidation~~31, ~~date~~2020.

•~~New~~One-year ~~loan~~extension atof ~~Park~~a ~~City~~$1.3 billion ~~Center~~loan insecured ~~the~~by ~~amount~~cross-collateralized ofmortgages ~~$135.0~~on ~~million~~15 properties with an interest rate of LIBOR plus 31.0075%, which ~~matures~~matured on ~~September~~April 925, 2021. ~~This~~An ~~loan~~extension ~~replaced~~fee ~~the previous debt~~ of $~~172~~1.2 6 million ~~that~~was ~~matured~~paid ~~June~~in 6,conjunction ~~2019~~with ~~and included a pay down of~~ the ~~existing mezzanine loan in the amount of $36~~extension.8 ~~million.~~Refer ~~For~~to ~~the~~Note ~~period~~18 ~~between~~for ~~the~~additional ~~maturity date of the previous debt and the effective date of the new loan, the Company extended forbearance and paid forbearance fees in total amount of $0~~information.~~5 million.~~

•New loans at 730 Fifth Avenue in the amount of $807.5 million which mature on September 1, 2024. The loans consist of a senior loan in amount of $587.3 million with a 5-year term at LIBOR plus 3.00%, a senior mezzanine loan in amount of $97.9 million with a 5-year term at LIBOR plus 4.25%, and a junior loan in amount of $122.3 million with a 5-year term at LIBOR plus 5.50%. The loans replaced the previous debt of $720.0 million that was previously extended to August 27, 2019 and included a pay down of $180.0 million on June 28, 2019.

•New loan at Westlake Center in the amount of $48.8 million with an interest rate of LIBOR plus 2.50% which matures on July 10, 2021. This loan replaced the previous debt of $42.5 million that matured July 10, 2019.

•New loans at The Woodlands Mall in the amount of $465.0 million which mature on August 1, 2029. This consists of a $425.0 million loan with an interest rate of 4.25% and a $40.0 million loan with an interest rate of 5.50%. The loans have a weighted average interest rate of 4.36%. The loans replaced previous debt at the property of $294.0 million with a weighted average interest rate of 4.83% that were scheduled to mature on June 10, 2023. In connection with the refinancing, the Company incurred a prepayment penalty of $27.5 million which is recorded as a loss on extinguishment of debt on the Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2019.

•One year loan extension at 830 North Michigan Avenue. A principal repayment of $7.0 million was made in conjunction with the extension.

•One-year extension of a $1.3 billion loan secured by cross-collateralized mortgages on 15 properties with an interest rate of LIBOR plus 1.75%, which was scheduled to mature on April 25, 2020 and was subsequently further extended in April 2020. A principal repayment of $10.1 million was made in conjunction with the extension.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Corporate and Other Unsecured Loans

We have certain debt obligations, the terms of which are described below:

	September 30, 2020 (1)		Weighted-AverageInterest Rate		December 31, 2019 (2)		Weighted-AverageInterest Rate
	March 31, 2021 (1)		Weighted-AverageInterest Rate		December 31, 2020 (2)		Weighted-AverageInterest Rate
Corporate debt:
Senior secured corporate debt	$	45,~~981~~024,~~767~~904	2.8176	%	$	45,~~769~~064,~~510~~522	42.1680	%
Senior secured notes - silver bonds	945,360		5.75	%	~~999~~945,~~950~~360		5.75	%
Total corporate debt	$	5,~~927~~970,~~127~~264	3.2823	%	56,~~769~~009,~~460~~882		43.4426	%

(1) Excludes deferred financing costs of $8572.39 million in ~~2020~~2021 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets.

(2) Excludes deferred financing costs of $9979.41 million in ~~2019~~2020 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets.

On May 241, ~~2020~~2019, the Company ~~executed~~and aBPR ~~series~~Cumulus ofLLC, ~~transactions~~BPR toNimbus ~~repurchase~~LLC ~~corporate~~and ~~debt~~GGSI onSellco ~~the~~LLC ~~open market~~(each, ~~funded~~an byindirect ~~intercompany~~subsidiary ~~loans~~of ~~from~~the ~~BPY~~Company) issued $1.0 ~~The~~billion ~~total~~aggregate ~~amounts~~principal amount of ~~debt~~5.75% ~~repurchased~~Senior ~~had~~Secured aNotes ~~par~~- ~~value~~Silver ofBonds ~~$59~~due 2026.~~6 million,~~ ~~and~~The anotes ~~cash~~bear ~~repurchase~~interest ~~price~~at ofan ~~$45.3 million.~~annual ~~Following~~rate ~~each~~of ~~repurchase,~~5.75% ~~the~~payable ~~repurchased~~on ~~debt~~May is15 ~~formally~~and ~~cancelled.~~November As15 ~~a result~~ of ~~the~~each ~~debt~~year, ~~repurchase~~beginning ~~and~~on ~~cancellation~~November 15, ~~the~~2019 ~~Company~~and ~~recognized~~will amature ~~gain~~on ofMay ~~$14~~15, 2026.~~3 million~~ ~~included~~During inthe ~~Gain~~year onended ~~extinguishment~~December 31, of2020, ~~debt on~~ the ~~Consolidated~~Company ~~Statements~~made ofprincipal ~~Operations~~payments ~~and~~totaling ~~Comprehensive~~$54.6 million. ~~Income~~The ~~(Loss)~~remaining ~~for~~outstanding ~~the~~balance ~~nine~~as ~~months~~of ~~ended~~March 31, ~~September~~2021 ~~30,~~was ~~2020~~$945.4 million.

On ~~May~~June 125, 2019, the Company ~~and~~secured ~~BPR~~a ~~Cumulus~~$70.5 million ~~LLC~~subordinated unsecured note with Brookfield BPY Holdings Inc., ~~BPR~~a ~~Nimbus~~related ~~LLC~~party. The note bore interest at a rate equal to LIBOR plus 2.75% and ~~GGSI~~was ~~Sellco~~scheduled ~~LLC~~to ~~(each~~mature on June 25, an2029. ~~indirect~~During ~~subsidiary~~the ofyear ended December 31, 2020, the Company) ~~issued~~repaid $1this loan in full.0 ~~billion~~On ~~aggregate~~February ~~principal~~10, ~~amount~~2020, ofthe 5Company secured an additional $27.~~75%~~0 ~~Senior~~million ~~Secured~~subordinated ~~Notes~~unsecured -note ~~Silver~~with ~~Bonds~~Brookfield ~~due~~BPY ~~2026~~Holdings Inc. The ~~notes~~note ~~bear~~bears interest at anrate ~~annual~~equal ~~rate~~to ofLIBOR 5plus 2.75%, ~~payable~~and matures on ~~May~~February 1510, ~~and~~2030. ~~November~~On 15August 27, 2020, the Company made a principal payment of ~~each~~$19.5 million. ~~year~~On March 25, ~~beginning~~2020, onthe ~~November~~Company ~~15,~~secured ~~2019~~another ~~and~~$29.0 ~~will~~million ~~mature~~note. onThe ~~May~~note ~~15,~~bears ~~2026~~interest at rate equal to LIBOR plus 2.75%, ~~During~~and ~~the~~matures ~~last~~on ~~quarter~~March of25, ~~2019~~2030. On May 19, 2020, the Company ~~made~~secured aan ~~principal~~additional ~~payment~~$25.0 million insubordinated ~~amount~~unsecured ofnote with Brookfield BPY Holdings Inc., and another $5045.0 million ~~thousand~~on May 22, 2020. ~~During~~The ~~the~~notes ~~nine~~were ~~months~~repaid ~~ended~~in ~~September 30~~full on June 18, 2020 and July 16, ~~the~~2020, ~~Company~~respectively. ~~made~~On ~~additional~~June ~~principal~~25, ~~payments~~2020, ~~totaling~~the Company secured another $5425.60 million subordinated unsecured note at an interest rate equal to LIBOR plus 1.94% that is scheduled to mature on August 27, 2022. The ~~remaining~~total outstanding balance of the notes as of ~~September~~March 3031, ~~2020~~2021 was $~~945~~63.4 million, including $1.9 million of payment-in-kind interest.

OnThe ~~March 25, 2019, the~~ Company ~~secured~~entered ainto ~~$341.8 million subordinated unsecured note with Brookfield BPY Holdings Inc.,~~ a ~~related~~new ~~party.~~credit ~~The~~agreement ~~note~~(the ~~bore~~"Credit ~~interest~~Agreement") atdated aas ~~rate~~of ~~equal~~August ~~to LIBOR plus 2.75% and was scheduled to mature on March 25~~24, ~~2029.~~2018 ~~During~~consisting ~~the year ended December 31, 2019, the Company repaid this loan in full. The Company borrowed an additional $70.5 million during the second quarter~~ of ~~2019, with~~ a ~~maturity~~revolving ~~date~~credit offacility ~~June~~(the 25"Facility"), ~~2029.~~Term ~~During~~A-1 ~~the~~and ~~year~~A-2 ~~ended December 31~~loans, ~~2019,~~and ~~the~~a ~~Company~~Term ~~made~~B ~~principal payments totaling $68~~loan.0 ~~million.~~ The ~~Company~~Facility ~~borrowed~~provides anfor ~~additional~~revolving ~~$31.7~~loans ~~million during the last quarter~~ of ~~2019~~up ~~which~~to ~~was due on January 6, 2020 and has been repaid. On February 10, 2020, the Company secured an additional~~ $271.05 ~~million~~billion ~~subordinated unsecured note with Brookfield BPY Holdings Inc,~~ and ~~another~~borrowings ~~$29.0 million note on March 25, 2020. The notes~~ bear interest at a rate equal to LIBOR plus 2.~~75%, and mature on February 10, 2030 and March~~ 25~~, 2030, respectively~~%. ~~On May 19, 2020, the Company secured an additional $25.0 million subordinated unsecured note with Brookfield BPY Holdings Inc., and another $45.0 million on May 22, 2020.~~ The ~~notes~~Facility were repaid in full on June 18, 2020 and July 16, 2020, respectively. On June 25, 2020, the Company secured another $25.0 million subordinated unsecured note at an interest rate equal to LIBOR plus 1.94% that is scheduled to mature onin August ~~27,~~ 2022. ~~On July 16, 2020~~ and ~~August~~had ~~27,2020,~~outstanding ~~the~~borrowings ~~Company made a principal payments in the amount~~ of $45985.0 ~~million and $22.1~~ million, ~~respectively. The total outstanding balance of the notes~~ as of ~~September~~March 3031, ~~2020 was $61~~2021.~~5 million,~~ ~~including~~The $Term A-1~~.2 million~~ ofLoan ~~accrued~~has ~~interest.~~a total

The Company entered into a new credit agreement (the "Credit Agreement") dated as of August 24, 2018 consisting of a revolving credit facility (the "Facility"), Term A-1 and A-2 loans, and a Term B loan. The Facility provides for revolving loans of up to $1.5 billion and borrowings bear interest at a rate equal to LIBOR plus 2.25%. The Facility is scheduled to mature in August 2022 and had outstanding borrowings of $920.0 million as of September 30, 2020. The Term A-1 Loan has a total commitment outstanding of $900.0 million, with $700.0 million attributable to BPYU and $200.0 million attributable to an affiliate, and is scheduled to mature in August 2021, bearing interest at a rate equal to LIBOR plus 2.25%. During the quarter ended September 30, 2020, the Company didn't make principal payments, and the remaining outstanding balance was $34.8 million. The Term A-2 Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2023, bearing interest at a rate equal to LIBOR plus 2.25%, and the outstanding balance at September 30, 2020 was $2.0 billion. The

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

commitment outstanding of $900.0 million, with $700.0 million attributable to BPYU and $200.0 million attributable to an affiliate, and is scheduled to mature in August 2021, bearing interest at a rate equal to LIBOR plus 2.25%. During the quarter ended March 31, 2021, the Company made a principal payment in the amount of $4.8 million, and the remaining outstanding balance as of March 31, 2021 was $21.0 million. The Term A-2 Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2023, bearing interest at a rate equal to LIBOR plus 2.25%, and the outstanding balance at March 31, 2021 was $2.0 billion. The Term B Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2025 bearing interest at a rate equal to LIBOR plus 2.50%. During the quarter ended ~~September~~March 3031, ~~2020~~2021, the Company made a principal payment in the ~~total~~ amount of $5.0 million. The total outstanding balance of the Term B loan as of ~~September~~March 3031, ~~2020~~2021 was $1,~~955~~945.0 million. The Term A-1, A-2, and B Loans are contractually obligated to be prepaid through net proceeds from property level refinances and asset sales as outlined in the Credit Agreement.

The Credit Agreement 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 to maintain compliance with certain financial covenants related to a maximum net debt-to-value ratio and a minimum fixed-charge-coverage ratio, as defined in the Credit Agreement.

On July 29, 2020, the Company entered into the First Amendment of its Credit Agreement in order to give effect to certain amendments, including, but not limited to the following:

•The lenders have agreed to certain covenant relief in respect of the financial covenants through the fiscal quarter ending June 30, 2021 (the “Covenant Relief Period”). The maximum total indebtedness to value ratio financial maintenance covenant is being eliminated permanently. The minimum fixed charge coverage ratio is being reduced to 1.20x during the Covenant Relief Period and increasing to 1.35x thereafter.

•The applicable margin for the Term A Loans and the Facility will be LIBOR plus 3.00% during the Covenant Relief Period – and thereafter, will be LIBOR plus 3.00% if the total net indebtedness to value ratio is greater than 70%.

•The Company agreed to maintain an ongoing liquidity covenant (set at $500 million) which will be tested as of the last day of each month against the amount of unrestricted cash, undrawn available amounts under the Facility and undrawn amounts under the new Brookfield Liquidity Facility. The Company will enter into and maintain a $500 million Brookfield Liquidity Facility (the “Brookfield Liquidity Facility”) and prior to the date the Company demonstrates compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment, any interest and principal payments thereunder must be paid-in-kind.

•The Company will be required to "match-fund" drawings under the Facility in excess of $1.0 billion using proceeds of either the Brookfield Liquidity Facility or issuances of qualified equity interests. The match-funding requirement will be required to be made (i) monthly, whereby any drawing during that month is in excess of the prior highest balance of the revolver (in excess of $1.0 billion), (ii) within 10 business days of a request from the agent if as of any day during a month, the excess draw amount would exceed $10 million and (iii) at any time of request for a revolving loan that the excess would be $100 million or greater (which would be match-funded substantially concurrently with the requested revolving loan draw).

•The Company will also be required to make additional prepayments of the Term A loans with proceeds of certain equity, debt issuances and asset sales.

•The Company also agreed to a number of additional restrictions, including restrictions on incurring additional indebtedness, making of certain restricted payments and the use of proceeds under the revolving facility, which will apply either through the end of the Covenant Relief Period – and in the case of certain provisions, until the Company demonstrates compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment.

As of ~~September~~March 3031, ~~2020~~2021, we are not aware of any instances of non-compliance with such covenants. Though there is potential for a risk of default (See Note 17 for discussion specific to COVID-19), in the event the Company fails to maintain compliance with its financial covenants, the Credit Agreement provides for a cure period, during which the Company has the opportunity to raise additional cash and reduce net debt balance, such as through capital contributions from BPY, or disposition of assets. Management has determined that in the event of a default, it is probable that these market-based alternatives would be available, ~~and that these actions would provide the necessary cash flows to prevent or cure an event of default, although there is no guarantee that these market-based alternatives would be available.~~

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

and that these actions would provide the necessary cash flows to prevent or cure an event of default, although there is no guarantee that these market-based alternatives would be available.

Junior Subordinated Notes

GGP Capital Trust I, a Delaware statutory trust (the "Trust"), 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 BPROP. 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 BPROP 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 ~~September~~March 3031, ~~2020~~2021 and December 31, ~~2019~~2020.

Letters of Credit and Surety Bonds

We had outstanding letters of credit and surety bonds of $49.98 million as of ~~September~~March 3031, ~~2020~~2021 and $50.01 million as of December 31, ~~2019~~2020. 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 material non-compliance with our financial covenants related to our mortgages, notes and loans payable as of ~~September~~March 3031, ~~2020~~2021.

NOTE 7 LEASES

Lessee arrangements

We are the lessee in several ground lease agreements for the land under some of our owned buildings. Generally, we own the land underlying the properties; however, at certain properties, all or part of the underlying land is owned by a third party that leases the land to us through a long-term ground lease. In addition, we lease office space for our corporate headquarters and field offices. Our material consolidated leases have reasonably certain lease terms ranging from four years to forty years. Certain leases provide the lessee with two to three renewal options which are considered to be termination options unless it is reasonably certain that the Company will elect to renew and generally range from five years to ten years each, with renewal rent payments based on a predetermined annual increase, market rates at the time of exercise of the renewal, or changes in the Consumer Price Index ("CPI").

As of ~~September~~March 3031, ~~2020~~2021, the balance of ROU assets was $~~395~~390.03 million, net and lease liabilities of $7573.89 million for seven ground leases and one office lease in the Consolidated Balance Sheets under Topic 842, included in prepaid expenses and other assets and accounts payable and accrued expenses, respectively.

~~The maturity of our operating lease liabilities as of September 30, 2020 is as follows:~~27

Year	Amount
Remainder of 2020	$	2,316
2021	9,470
2022	9,704
2023	9,968
2024	10,200
2025	10,439
2026 and thereafter	155,012
Total undiscounted lease payments	207,109
Less: Present value adjustment	(131,281)
Total lease liability	$	75,828

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

The maturity of our operating lease liabilities as of March 31, 2021 is as follows:


Year	Amount
Remainder of 2021	$	7,093
2022	9,704
2023	9,968
2024	10,200
2025	10,439
2026	10,684
2027 and thereafter	144,328
Total undiscounted lease payments	202,416
Less: Present value adjustment	(128,514)
Total lease liability	$	73,902

Straight-line rent expense recognized for our consolidated operating leases is as follows:

Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2021

Three Months Ended March 31, 2020

Ground leases

1,~~773~~774

~~620~~2,399

~~5,944~~

~~1,998~~

Office leases

1,964

21,~~164~~964

~~5,892~~

Straight-line rent expense is included in other property operating costs for ground leases and property management and other costs for the office lease, respectively, in the Consolidated Statements of Operations and Comprehensive Income (Loss). Several lease agreements include variable lease payments which vary based on factors such as sublease income received, the revenues or net operating income of the properties constructed on the leased premises, increases in CPI, and changes in market rents. In addition, our leases require us to reimburse the lessor for the lessor’s tax, insurance and common area costs. Variable lease payments and short-term lease costs recognized as rent expense for operating leases were not significant for each of the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020 and are included in other property operating costs in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following summarizes additional information related to our operating leases as of ~~September~~March 3031, ~~2020~~2021 and ~~September~~March 3031, ~~2019~~2020:

September 30, 2020

September 30, 2019

March 31, 2021

March 31, 2020

Weighted-average remaining lease term (years)

23.23

1623.92

Weighted-average discount rate

7.6869%

7.3667%

Supplemental disclosure for the consolidated statements of cash flows:

Cash paid for amounts included in the measurement of lease liabilities

$62,~~947~~377

$62,~~406~~336

Lessor arrangements

We own a property portfolio comprised primarily of Class A retail properties and lease this retail space to tenants. As of ~~September~~March 3031, ~~2020~~2021, we own a controlling interest in and consolidated 6362 retail properties located throughout the United States comprising approximately 5554 million square feet of GLA. We enter into operating leases with a variety of tenants, the majority of which are national and regional retail chains and local retailers. These operating leases expire starting in the remainder of year ~~2020~~2021 and typically include renewal options, which are generally exercisable only by the tenant. Certain leases also include early termination options which are typically exercisable only by the tenant. Our leases do not allow the tenant to purchase the retail space.

~~The maturity analysis of the lease payments we expect to receive from our operating leases as of September 30, 2020 is as follows:~~28

Year	Amount
Remainder of 2020	$	276,694
2021	1,047,375
2022	947,590
2023	828,518
2024	693,861
2025	566,118
Subsequent	1,820,055
	$	6,180,211

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

The maturity analysis of the lease payments we expect to receive from our operating leases as of March 31, 2021 is as follows:


Year	Amount
Remainder of 2021	$	750,388
2022	923,135
2023	808,919
2024	685,504
2025	568,089
2026	473,326
Subsequent	1,391,642
	$	5,601,003

All lease-related income is reported as a single line item, rental revenues, in our Consolidated Statements of Operations and Comprehensive Income (Loss). Effective January 1, 2019, with the adoption of Topic 842, rental revenues is presented net of provision for doubtful accounts. Rental income recognized on a straight-line basis consists primarily of fixed and in-substance fixed lease payments (including lease payments related to non-lease components which have been combined with the lease component). Variable rental income represents variable lease payments, which consist primarily of overage rents; reimbursements for tenants’ pro rata share of real estate taxes, insurance, property operating and marketing expenses, and utilities; lease payments related to CPI-based escalations and market rent resets; and lease termination income.

In accordance with the terms of our operating leases, we bill our tenants separately for minimum rents, tenant recoveries, overage rents and lease termination income as shown below for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020:

	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
					Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Minimum rents, billed	$	~~249,167~~	$	~~224,326~~	$	~~752~~235,~~053~~301	$	~~665~~253,~~263~~509
Tenant recoveries, billed	~~101,133~~		~~89,253~~		~~298~~91,~~029~~290		~~269~~99,~~346~~045
Lease termination income, billed	~~2,637~~		~~3,875~~		510,~~004~~339		~~6,320~~854
Overage rent, billed	~~1,567~~		~~2,865~~		76,~~060~~593		95,~~159~~394
Total contractual operating lease billings	354,504		320,319		1,062,146		950,088
COVID-19 rent abatements granted					(36,159)		—
Adjustment to recognize contractual operating lease billings on a straight-line basis	1,757		1,684		5,943		5,633
Total contractual operating lease billings					307,364		358,802
Above and below-market tenant leases, net	7,193		(37)		7,995		7,250
Adjustment to recognize contractual operating lease billings on a straight-line basis					14,098		4,476
Less provision for doubtful accounts	(36,747)		(4,497)		(56,475)		(8,243)
Above and below-market tenant leases, net					5,290		(6,476)
Total rental revenues, net	$	326,707	$	317,469	$	1,019,609	$	954,728
Less provision for doubtful accounts					171		(4,973)
Total rental revenues, net					$	326,923	$	351,829

OfAs a result of the ~~total~~COVID-19 ~~contractual~~pandemic, ~~rental~~a ~~revenues~~significant weportion ~~have~~of ~~billed~~the Company’s tenants requested rental assistance, ~~82.4%~~whether ~~and~~in 81the form of deferral or rent reduction.5% Lease concessions granted in response to the COVID-19 pandemic are ~~fixed~~accounted for as a lease ~~payments~~modification ~~for~~and are recognized prospectively over the ~~three~~remaining ~~and~~lease ~~nine~~term ~~months~~when ~~ended~~they ~~September 30~~become legally enforceable. However, ~~2020~~prior to the legal execution of the lease concession, ~~respectively~~when establishing its general allowance, ~~and~~the ~~78.0%~~Company ~~and~~recognizes 78the portion of estimated concessions that is deemed attributable to the current period through consideration of weighted average remaining lease terms.9% ~~are~~In ~~fixed~~the table above, contractual operating lease ~~payments~~billings ~~for~~are reduced by rent abatements executed during the ~~three~~period. ~~and~~Such ~~nine~~rent ~~months~~abatements, ~~ended~~net ~~September 30~~of estimated lease concessions previously recognized in the general allowance, ~~2019~~are recognized as an increase to straight-line rent receivables. In the table above, ~~respectively~~such amounts are included in the adjustment to recognize contractual operating lease billings on a straight-line basis.

~~NOTE~~Of ~~8 INCOME~~the ~~TAXES~~total contractual rental revenues we have billed, 71.2% and 79.4% are fixed lease payments for the three months ended March 31, 2021, and 2020, respectively.

The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. 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.29

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 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. Depending on the extended due date for partnership and corporate income tax returns, we are statutorily open to audit by the Internal Revenue Service for the years ended December 31, 2016 or December 31, 2017 through 2019 and are generally statutorily open to audit by state taxing authorities for the years ended December 31, 2015 or December 31, 2016 through 2019.

We have no unrecognized tax benefits recorded pursuant to uncertain tax positions as of September 30, 2020.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 8 INCOME TAXES

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 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. Depending on the extended due date for partnership and corporate income tax returns, we are statutorily open to audit by the Internal Revenue Service for the years ended December 31, 2017 through 2020 and are generally statutorily open to audit by state taxing authorities for the years ended December 31, 2016 through 2020.

We have no unrecognized tax benefits recorded pursuant to uncertain tax positions as of March 31, 2021.

NOTE 9 EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

Allocation to Noncontrolling Interests

Noncontrolling interests consists of the redeemable interests related to BPROP Common, Preferred, and LTIP Units and the noncontrolling interest in our consolidated joint ventures. The following table reflects the activity included in the allocation to noncontrolling interests.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2020

2019

2020

2019

2021

2020

Distributions to preferred BPROP units ("Preferred Units")

(~~900~~924)

(~~1,352~~910)

~~(2,716)~~

~~(4,389)~~

Net loss allocated to noncontrolling interest in consolidated real estate affiliates

~~724~~53,913

~~389~~9,030

~~10,089~~

~~10,309~~

Net loss allocated to noncontrolling interest of the Operating Partnership (1)

19(26,~~806~~559)

410,~~329~~502

~~53,434~~

~~28,697~~

Allocation to noncontrolling interests

1926,~~630~~430

318,~~366~~622

~~60,807~~

~~34,617~~

Other comprehensive loss allocated to noncontrolling interests

96(110)

—

~~1,722~~

—

Comprehensive loss allocated to noncontrolling interests

1926,~~726~~320

318,~~366~~622

~~62,529~~

~~34,617~~

_______________________________________________________________________________

(1) Represents the noncontrolling interest of our institutional investor.

Noncontrolling Interests

The noncontrolling interest related to the Common, Preferred, and LTIP Units of BPROP 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 BPROP 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 (loss) to arrive at net income (loss) attributable to BPYU. The preferred redeemable noncontrolling interests have been recorded at carrying value.

Holders of Series B Preferred Units, Series D Preferred Units, Series E Preferred Units and Series G Preferred Units of BPROP are each entitled to periodic distributions at the rates set forth in the Sixth Amended and Restated Agreement of Limited Partnership of BPROP. Generally, each Series K Preferred Unit of BPROP entitles its holder to distributions and a liquidation preference identical to those established for each share of BPYU's Class A Stock. The holders of Series L Preferred Units of BPROP are generally entitled to a pro rata distribution of an aggregate cash amount equal to the sum of (i) the aggregate cash dividends declared on all outstanding shares of BPYU's Class B Stock and (ii) the aggregate cash dividends declared on all outstanding shares of BPYU's Series B Preferred Stock. Holders of Common Units of BPROP are entitled to distributions of all or a portion of BPROP’s remaining net operating cash flow, when and as declared by BPROP’s general partner. However, the Sixth Amended and Restated Agreement of Limited Partnership of BPROP permits distributions solely to BPYU if such distributions were required to allow the Company to comply with the REIT distribution requirements or to avoid the imposition of excise tax.30

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Noncontrolling Interests - Permanent

As of ~~September~~March 3031, ~~2020~~2021, there were 9,717.658 Series B Preferred Units of BPROP outstanding. The Series B Preferred Units have a carrying value of $50 per unit.

Also, as of ~~September~~March 3031, ~~2020~~2021, there were ~~788~~776,734.3886 Common Units of BPROP outstanding and ~~320~~315,~~873~~992.~~9798~~1238 Series K Preferred Units of BPROP (held by former common unit holders). These Series K Units were established at $21 per unit and are not subject to adjustment based on fair value.

During the quarter ended March 31, 2020, BPYU entered into an agreement with a Limited Partner to redeem 3,318,399.56 Common Units at a purchase price per unit of $0.32440587 for an aggregate cost of approximately $1.1 million. Furthermore, there were 1,349,995.76 Series K Preferred Units of BPROP redeemed at a price per unit of $19.635 for an aggregate cost of approximately $26.5 million.

During the quarter ended September 30, 2020, BPYU entered into an agreement with a Limited Partner to redeem 49,837.90 Common units at a purchase price per unit of $.32440587 and 20,275.12 Series K preferred Units redeemed at a purchase price per unit of $11.57 for an aggregate combined cost of $0.25 million.

Noncontrolling Interests - Redeemable

The Series D Preferred Units of BPROP are convertible based on a conversion ratio of 1.50821, which is the quotient of the Series D Preferred Unit’s $50 liquidation preference and $33.151875 conversion price. Upon conversion, each Series D Preferred Unit entitles its holder to (i) $21.9097 in cash, (ii) a number of Series K Preferred Units of BPROP equal to (x) 0.40682134 Series K Preferred Units (which is subject to adjustment), multiplied by (y) the Series D conversion ratio; and (iii) a number of Common Units of BPROP equal to (x) one Common Unit (which is subject to adjustment), multiplied by (y) the Series D conversion ratio. As of ~~September~~March 3031, ~~2020~~2021, there were 532,749.6574 Series D Preferred Units of BPROP outstanding.

The Series E Preferred Units of BPROP are convertible based on a conversion ratio of 1.29836, which is the quotient of the Series E Preferred Unit’s $50 liquidation preference and $38.51 conversion price. Upon conversion, each Series E Preferred Unit entitles its holder to (i) $18.8613 in cash, (ii) a number of Series K Preferred Units of BPROP equal to (x) 0.40682134 Series K Preferred Units (which is subject to adjustment), multiplied by (y) the Series E conversion ratio; and (iii) a number of Common Units of BPROP equal to (x) one Common Unit (which is subject to adjustment), multiplied by (y) the Series E conversion ratio. As of ~~September~~March 3031, ~~2020~~2021, there were 502,657.8128 Series E Preferred Units of BPROP outstanding.

The holder of each Series K Preferred Unit of BPROP issued upon conversion of Series D Preferred Units or Series E Preferred Units of BPROP has the right to redeem such Series K Preferred Unit for a cash amount equal to the average closing price of BPYU’s Class A Stock for the five consecutive trading days ending on the date of the notice of redemption, provided that BPYU may elect to satisfy such redemption by delivering one share of BPYU’s Class A Stock. The holder of each Common Unit of BPROP issued upon conversion of Series D Preferred Units or Series E Preferred Units of BPROP has the right to redeem such Common Unit for a cash amount equal to $0.324405869, subject to adjustment.

Each LTIP Unit of BPROP is convertible into, and, except for the level of preference, entitles its holder to regular and liquidating distributions equivalent to that of 0.016256057 Series K Preferred Units, subject to adjustment. Each Series K Preferred Unit received by an LTIP holder in connection with the BPY Transaction of 2018 is redeemable for a cash amount equal to the average closing price of BPYU's Class A Stock for five consecutive trading days ending on the date of the notice of redemption, provided that BPYU may elect to satisfy such redemption by delivering one share of BPYU's Class A Stock. If the holders had requested redemption of the Class A Stock and Preferred Units as of ~~September~~March 3031, ~~2020~~2021, the aggregate amount of cash the Company would have paid would have been $~~510~~694.90 million and $5556.52 million, respectively.

3631

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

The following table reflects the activity of the common redeemable noncontrolling interests for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020.

Balance at January 1, 2019	$	73,696
Net income	3,358
Series K Preferred Unit redemption	(14,935)
Balance at March 31, 2019	62,119
Net income	103
Balance at June 30, 2019	62,222
Net income	42
Balance at September 30, 2019	$	62,264
Balance at January 1, 2020	$	62,235
Net loss	(441)
Net income	(441)
Series K Preferred Unit redemption	(388)
Balance at March 31, 2020	61,406
Net income	441
Balance at January 1, 2021	$	60,826
Series K Preferred Unit redemption	(10373)
Balance at June 30, 2020	61,837
Balance at March 31, 2021	$	60,453
Series K Preferred Unit redemption	(167)
Balance at September 30, 2020	$	61,670

Redeemable Class A Stock

Class A Stock refers to the Company's Class A Stock, par value $0.01 per share, authorized and issued to GGP common stockholders that were unaffiliated with BPY as part of the BPY Transaction of 2018. The Company's Class A Stock is listed on the Nasdaq Global Select Market ("Nasdaq"). Our Class A Stock has traded on Nasdaq under the symbol "BPYU" since March 2, 2020, prior to which it traded under the symbol "BPR".

Each share of Class A Stock is entitled to cumulative dividends per share in a cash amount equal in value to the amount of any distribution made on a BPY limited partnership unit ("BPY unit"). In addition, each share of Class A Stock is exchangeable for one BPY unit or its cash equivalent (the form of payment to be determined by BPY or an affiliate, in its sole discretion). Such exchange and distribution rights are subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU. If and to the extent declared by the Company's board of directors, the record and payment dates for the dividends or other distributions upon the shares of Class A Stock, to the extent not prohibited by applicable law, is expected to be the same as the record and payment dates for the dividends or other distributions upon the BPY units. Pursuant to the terms of the Company's charter, all such dividends to holders of Class A Stock will be paid prior and in preference to any dividends or distributions on the Class B Stock, Series B Preferred Stock or Class C Stock will be fully declared and paid before any dividends are declared and paid or any other distributions are made on any Class B Stock, Series B Preferred Stock or Class C Stock. The holders of Class A Stock shall not be entitled to any dividends from BPYU other than the Class A dividend.

Upon any liquidation, dissolution or winding up of the Company that is not a Market Capitalization Liquidation Event (as defined below) or substantially concurrent with the liquidation, dissolution or winding up of BPY, the holders of Class A Stock are entitled to a cash amount, for each share of Class A Stock, equal to the market price of one BPY unit (subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU) on the date immediately preceding announcement of such liquidation, dissolution or winding up, plus all declared and unpaid dividends. If, upon any such liquidation, dissolution or winding up, the assets of BPYU are insufficient to make such payment in full, then the assets of BPYU will be distributed among the holders of Class A Stock ratably in proportion to the full amounts to which they would otherwise be respectively entitled to receive.

37If the market capitalization of the Class A Stock (i.e., if the price per share of Class A Stock, multiplied by the number of shares of Class A Stock outstanding) averages, over any period of 30 consecutive trading days, less than one (1) billion dollars, the BPYU board will have the right to liquidate BPYU’s assets and wind up BPYU’s operations (a "Market Capitalization Liquidation Event"). Upon any Market Capitalization Liquidation Event, the holders of Class A Stock shall be entitled to a cash amount, for each share of Class A Stock, equal to the dollar volume-weighted average price of one BPY unit over the ten (10) trading days immediately following the public announcement of such Market Capitalization Liquidation Event, plus all declared and unpaid dividends. If, upon any such Market Capitalization Liquidation Event, the assets of BPYU are insufficient to make such payment in full, then the assets of BPYU will be distributed among the holders of Class A Stock ratably in proportion to the full amounts which they would otherwise be respectively entitled to receive. Notwithstanding the foregoing, upon any Market Capitalization Liquidation Event, BPY may elect to exchange all of the outstanding shares of the Class A Stock for BPY units on a one-for-one basis, subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

If the market capitalization of the Class A Stock (i.e., if the price per share of Class A Stock, multiplied by the number of shares of Class A Stock outstanding) averages, over any period of 30 consecutive trading days, less than one (1) billion dollars, the BPYU board will have the right to liquidate BPYU’s assets and wind up BPYU’s operations (a "Market Capitalization Liquidation Event"). Upon any Market Capitalization Liquidation Event, the holders of Class A Stock shall be entitled to a cash amount, for each share of Class A Stock, equal to the dollar volume-weighted average price of one BPY unit over the ten (10) trading days immediately following the public announcement of such Market Capitalization Liquidation Event, plus all declared and unpaid dividends. If, upon any such Market Capitalization Liquidation Event, the assets of BPYU are insufficient to make such payment in full, then the assets of BPYU will be distributed among the holders of Class A Stock ratably in proportion to the full amounts which they would otherwise be respectively entitled to receive. Notwithstanding the foregoing, upon any Market Capitalization Liquidation Event, BPY may elect to exchange all of the outstanding shares of the Class A Stock for BPY units on a one-for-one basis, subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU.

Holders of Class A Stock shall have the right to exchange all or a portion of their Class A Stock for cash at a price equal to the value of an equivalent number of BPY units, subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU. Upon receipt of a request for exchange, BPYU will deliver a notice of exchange to BPY within one (1) business day and will have ten (10) business days to deliver the cash amount to the tendering holder. Upon receipt of the notice of exchange, BPY or an affiliate may elect to satisfy BPYU’s exchange obligation by exchanging all of the shares of the Class A Stock tendered for BPY units on a one-for-one basis. This initial one-for-one conversion factor is subject to adjustment in the event of certain dilutive or other capital events by BPY or BPYU. If so elected, BPY will have to satisfy such obligation within ten (10) business days from the date of the notice of exchange. If BPY exercises its right to assume the exchange obligation, units of BPY units will be delivered in exchange for the Class A Stock and such Class A Stock will automatically be converted into Class B Stock.

As there are certain events outside of the Company’s control whereby it could be required to redeem the Class A Stock for cash by the holders of the securities, the Class A Stock is included in redeemable equity. Accordingly, the Class A Stock are recorded at the greater of the carrying amount 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 the Company’s Consolidated Balance Sheets. There is no adjustment within additional paid-in capital for the Class A stock when the fair value is less than the carrying value.

Class B Stock

The Company’s shareholders approved the amendment and restatement of the Company’s charter at its annual stockholder meeting on June 19, 2019 (the "Restated Charter"), which became effective on June 26, 2019 and, among other things, authorized the Company’s issuance of up to 965,000,000 shares of a new class of stock called Class B-2 Stock, par value of $0.01 per share. Each share of Class B-2 Stock shall have terms (including the same powers, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions) identical to the terms of a share of Class B-1 Stock other than voting rights. The following description sets forth certain general terms and provisions of the Company's Class B-1 Stock and Class B-2 Stock (together the "Class B Stock").

Pursuant to the Restated Charter and subject to the prior rights of holders of all classes, including the Class A Stock, and any series of preferred stock at the time outstanding having prior rights as to dividends, each share of Class B Stock entitles its holder to cumulative dividends per share in a cash amount at a rate of 6.5% per year of the Class B liquidation amount per share (which rate was 10.0% per year until the effective date of the Restated Charter on June 26, 2019) equal to $21.39 per share. On October 18, 2018, each holder of the Class B-1 Stock hereby irrevocably waived, all of its right, title and interest in and to 2.5% of the dividend rate, including without elimination all rights and entitlement to payment of such amounts. This partial dividend waiver resulted in a 7.5% effective rate per year of the Class B Liquidation Amount per share and was terminated upon the effectiveness of the Restated Charter. Dividends on the Class B Stock may also be paid by an in-kind distribution of additional shares of Class B Stock or any other class of shares of capital stock of BPYU ranking junior to the Class A Stock. Dividends on the Class B Stock shall be cumulative and shall be payable quarterly in arrears, when, as and if declared by the Company's Board of Directors with respect to dividends on the Class B Stock.

Holders of the Class B Stock are not entitled to receive dividends, redemptions or other distributions: (i) unless and until (a) BPYU has paid the aggregate dividends owed to the holders of Class A Stock and (b) the dividend coverage ratio (as defined below) is equal to or greater than 1.25:1, (ii) if any tendering holder of Class A Stock has not received the cash or BPY units due upon exchange or (iii) if holders of Class A Stock are owed cash in the event of an adjustment to the conversion factor. The dividend coverage ratio is referred to as a ratio of (i) BPYU’s funds from operations, as calculated in accordance with the definition of funds from operations used by the National Association of Real Estate Investment Trusts ("Nareit"), for the immediately preceding fiscal quarter, to (ii) the product of (a) the amount of the most recent regular quarterly distribution declared by BPY on each BPY unit, times (b) the number of shares of Class A Stock outstanding at such time.

38Series B Preferred Stock

The following description sets forth certain general terms and provisions of the Series B Preferred Stock, par value $0.01 per share, of the Company (the "Series B Preferred Stock").

Table of Contents

Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

~~defined~~Preferred ~~below)~~Stock iswill ~~equal~~entitle its holder to orcumulative ~~greater~~dividends ~~than~~per ~~1.25:1,~~share ~~(ii) if~~in ~~any~~a ~~tendering~~cash ~~holder~~amount ofat ~~Class A~~a ~~Stock~~rate ~~has~~of ~~not~~8.65% ~~received~~per ~~the~~year ~~cash~~of orthe ~~BPY~~Class ~~units~~B ~~due~~liquidation ~~upon~~amount ~~exchange~~per orshare (~~iii) if~~which ~~holders~~rate ofwas ~~Class A~~10.0% ~~Stock~~until ~~are~~the ~~owed~~effective ~~cash~~date inof the ~~event~~Restated ofCharter anon ~~adjustment~~June to26, ~~the~~2019), ~~conversion~~with ~~factor.~~such ~~The~~Class ~~dividend~~B ~~coverage~~liquidation ~~ratio~~amount isper ~~referred~~share equal to as$21.39. Dividends aon ~~ratio~~the ofSeries ~~(i) BPYU’s~~B ~~funds~~Preferred ~~from~~Stock ~~operations,~~may asalso ~~calculated~~be paid by an in-kind ~~accordance~~distribution ~~with~~of ~~the~~additional ~~definition~~shares of ~~funds~~Series ~~from~~B ~~operations~~Preferred ~~used~~Stock byor ~~the~~any ~~National~~other ~~Association~~class of ~~Real~~shares ~~Estate~~of ~~Investment~~capital ~~Trusts~~stock ~~("Nareit"),~~of ~~for~~BPYU ranking junior to the ~~immediately~~Class ~~preceding~~A ~~fiscal~~Stock ~~quarter,~~and toClass ~~(ii) the~~B ~~product~~Stock. ofDividends ~~(a)~~ on the ~~amount~~Series ofB ~~the~~Preferred ~~most~~Stock ~~recent~~shall ~~regular~~be ~~quarterly~~cumulative ~~distribution~~and ~~declared~~shall bybe ~~BPY~~payable onquarterly ~~each~~in ~~BPY~~arrears, ~~unit~~when, ~~times~~as ~~(b)~~ and if declared by the ~~number~~Company's Board of ~~shares~~Directors ofwith ~~Class A~~respect ~~Stock~~to ~~outstanding~~dividends aton ~~such~~the ~~time~~Series B Preferred Stock.

Series B Preferred Stock

The following description sets forth certain general terms and provisions of the Series B Preferred Stock, par value $0.01 per share, of the Company (the "Series B Preferred Stock").

Pursuant to the Restated Charter and subject to the prior rights of holders of all classes, including the Class A Stock, Class B Stock and any series of preferred stock at the time outstanding having prior rights as to dividends, each share of Series B Preferred Stock will entitle its holder to cumulative dividends per share in a cash amount at a rate of 8.65% per year of the Class B liquidation amount per share (which rate was 10.0% until the effective date of the Restated Charter on June 26, 2019), with such Class B liquidation amount per share equal to $21.39. Dividends on the Series B Preferred Stock may also be paid by an in-kind distribution of additional shares of Series B Preferred Stock or any other class of shares of capital stock of BPYU ranking junior to the Class A Stock and Class B Stock. Dividends on the Series B Preferred Stock shall be cumulative and shall be payable quarterly in arrears, when, as and if declared by the Company's Board of Directors with respect to dividends on the Series B Preferred Stock.

Holders of the Series B Preferred Stock are not entitled to receive dividends, redemptions or other distributions: (i) unless and until (a) BPYU has paid the aggregate dividends owed to the holders of Class A Stock and Class B Stock and (b) the dividend coverage ratio (as defined below) is equal to or greater than 1.25:1, (ii) if any tendering holder of Class A Stock has not received the cash or BPY units due upon exchange or (iii) if holders of Class A Stock are owed cash in the event of an adjustment to the conversion factor. The dividend coverage ratio is referred to as a ratio of (i) BPYU’s funds from operations, as calculated in accordance with the definition of funds from operations used by Nareit, for the immediately preceding fiscal quarter, to (ii) the product of (a) the amount of the most recent regular quarterly distribution declared by BPY on each BPY unit, times (b) the number of shares of Class A Stock outstanding at such time.

Class C Stock

Class C Stock refers to the Company's Class C Stock, par value $0.01 per share, authorized as part of the BPY Transaction of 2018. Pursuant to the amended charter and subject to the prior rights of holders of all classes, including the holders of Class A Stock, Class B Stock, Series B Preferred Stock and any series of preferred stock at the time outstanding having prior rights as to dividends, each share of Class C Stock will entitle its holder to dividends when, as and if declared by the Company's Board of Directors out of any assets of BPYU legally available therefore. The record and payment date for dividends on shares of Class C Stock shall be such date that the Company's Board of Directors shall designate.

Notwithstanding the foregoing, holders of the Class C Stock are not entitled to receive dividends, redemptions or other distributions: (i) unless and until (a) BPYU has paid the aggregate dividends owed to the holders of Class A Stock and (b) the dividend coverage ratio is equal to or greater than 1.25:1, (ii) if any tendering holder of Class A Stock has not received the cash or BPY units due upon exchange, (iii) if holders of Class A Stock are owed cash in the event of an adjustment to the conversion factor or (iv) unless and until the full cumulative dividends on the Class B Stock and Series B Preferred Stock for all past dividend periods and any current dividend periods have been (or contemporaneously are) (a) declared or paid in cash or (b) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.

39Voting Rights


Stock Class	Authorized	Issued	Shares Outstanding	Votes per Share
Class A Stock	4,517,500,000	40,633,040	38,662,115	1:1
Class B-1 Stock	4,517,500,000	203,779,976	203,779,976	1:1
Class B-2 Stock	965,000,000	121,203,654	121,203,654	0:1
Series B Preferred Stock	425,000,000	202,438,184	202,438,184	1:1
Class C Stock	1,000,000,000	640,051,301	640,051,301	1:1

All share counts in table above are as of March 31, 2021.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Voting Rights

Stock Class	Authorized	Issued	Shares Outstanding	Votes per Share
Class A Stock	4,517,500,000	43,161,423	41,743,422	1:1
Class B-1 Stock	4,517,500,000	196,886,256	196,886,256	1:1
Class B-2 Stock	965,000,000	121,203,654	121,203,654	0:1
Series B Preferred Stock	425,000,000	202,438,184	202,438,184	1:1
Class C Stock	1,000,000,000	640,051,301	640,051,301	1:1

All share counts in table above are as of September 30, 2020.

Class A Stock Dividend

Our Board of Directors declared Class A Stock dividends during ~~2020~~2021 and ~~2019~~2020 as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

2021

February 1

February 26, 2021

March 31, 2021

0.3325

2020

November 5

November 30, 2020

December 31, 2020

0.3325

August 5

August 31, 2020

September 30, 2020

~~0.3325~~$

0.3325

May 7

May 29, 2020

June 30, 2020

~~0.3325~~$

0.3325

February 5

February 28, 2020

March 31, 2020

~~0.3325~~$

0.3325

2019

November 4

November 29

December 31

0.3300

August 1

August 30

September 30

0.3300

May 6

May 31

June 28

0.3300

February 6

February 28

March 29

0.3300

Class A Stock Repurchases and Conversions

OnIn ~~August~~the 1,first ~~2019~~quarter of 2020, ~~the~~BPYU ~~Company’s~~purchased ~~Board~~855,000 shares of ~~Directors~~Class ~~authorized~~A ~~the~~Stock ~~repurchase~~and ofdeposited ~~the~~them ~~greater~~in ofa ~~(i)~~trust 5%account ofmaintained by the Company’'s ~~Class~~transfer Aagent ~~Stock~~for ~~that~~the ~~are~~benefit ~~issued~~of orindividuals ~~outstanding~~who orreceived ~~(ii)~~grants ~~10%~~of restricted shares of ~~its~~Class ~~public~~A ~~float~~Stock ofpursuant to the Brookfield Property Group Restricted BPR Class A Stock ~~over~~Plan (the ~~next~~"Restricted 12Stock ~~months~~Plan"). ~~from~~These ~~time~~shares towere ~~time~~purchased asat ~~market~~an ~~conditions~~average ~~warrant~~price of $18.57 ~~This~~per ~~repurchase~~share ~~authorization~~for ~~expired~~an onaggregate ~~August~~cost 1,of ~~2020~~approximately $15.87 million.

On ~~March~~August 295, ~~2019~~2020, ~~BPYU~~the ~~purchased~~Company’s ~~for~~Board ~~cancellation 4,679,802 shares~~ of ~~Class~~Directors Aauthorized ~~Stock~~the atrepurchase aof ~~purchase~~the ~~price~~greater of ~~$20.30~~(i) ~~per~~5% ~~share, for an aggregate cost~~ of ~~approximately~~the ~~$95 million, excluding fees and expenses.~~ Company’s

In the second quarter of 2019, BPYU purchased 200,000 shares of Class A Stock at an average purchase price of $18.37 per share for an aggregate cost of approximately $3.68 million, which were subsequently canceled in July 2019.

Furthermore, there were 647,250 shares of Class A Stock that were purchased in relation to 2019 restricted stock grants. These shares were purchased at an average purchase price of $19.40 per share for an aggregate cost of approximately $12.59 million.

In the third quarter of 2019, BPYU purchased 197,225 shares of Class A Stock at an average purchase price of $18.56 per share for an aggregate cost of approximately $3.66 million, which were subsequently canceled in the quarter.

In the first quarter of 2020, BPYU purchased 855,000 shares of Class A Stock in relation to the 2020 restricted stock grant. These shares were purchased at an average price of $18.57 per share for an aggregate cost of approximately $15.87 million.

On August 6, 2020, the Company’s Board of Directors authorized the repurchase of the greater of (i) 5% of the Company’s

Class A Stock that are issued or outstanding or (ii) 10% of its public float of Class A Stock over the next 12 months from time

to time as market conditions warrant.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

On August 18, 2020, a total of 7,321,155 shares of Class A stock were properly tendered for an aggregate cost of approximately $87.9 million, equal to $12.00 per share.

In the third quarter of 2020, BPYU purchased for cancellation 2,606,289 shares of Class A Stock at an average purchase price of $11.46 per share for an aggregate cost of approximately $29.87 million.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, there were ~~11,578,482~~479 shares of Class A Stock converted to ~~7,495,510~~385 shares of Class B-1 Stock, at a weighted average price of $1317.8517 and $21.39, respectively.

In the first quarter of 2021, BPYU purchased 841,950 shares of Class A Stock and deposited them in a trust account maintained by the Company's transfer agent for the benefit of individuals who received grants of restricted shares of Class A Stock pursuant to the Restricted Stock Plan. These shares were purchased at an average price of $18.56 per share for an aggregate cost of approximately $15.63 million.

Class B Stock and Series B Preferred Stock Dividends

Our Board of Directors did not declare dividends on Class B-1 Stock, Class B-2 Stock, or Series B Preferred Stock during the ~~nine~~three months ended ~~September~~March 3031, ~~2020.~~2021 ~~Our~~or ~~Board~~in ~~of Directors declared dividends on these classes of stock during 2019 as follows:~~2020.

Class B-1 Stock Dividends

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

November 4

December 25

0.110

On November 4, 2019, a partial dividend was declared in the amount of $0.11 per share of the Class B-1 Stock.

Class B-2 Stock Dividends

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

November 4

December 25

0.110

On November 4, 2019, a partial dividend was declared in the amount of $0.11 per share of the Class B-2 Stock.

Combined Class B stock and Series B Preferred Stock (Prior to Restated Charter)

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

May 25

June 25

0.397

March 25

March 27

1.015

A dividend was declared on the Class B-1 Stock and the Series B Preferred Stock of the Company in the amount equal to all unpaid dividends on such shares from the date of issue to March 31, 2019 at the rate of 7.5% per annum payable on March 27, 2019 to the holders of record of Class B-1 Stock and the Series B Preferred Stock on March 27, 2019 for a combined distribution total of approximately $467.3 million.

In the second quarter of 2019, a dividend was declared on the Class B-1 Stock and the Series B Preferred Stock of the Company in the amount equal to all unpaid dividends on such shares from March 31, 2019 to June 25, 2019 at the rate of 7.5% per annum payable on June 25, 2019 to the holders of record of Class B-1 Stock and the Series B Preferred Stock on June 25, 2019 for a combined distribution total of approximately $183.8 million.

Table of Contents

Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Class B-1 Stock Issuance & Repurchase

In the first quarter of 2019, BPYU repurchased 10,496,703 shares of Class B-1 Stock held by BPR FIN 1 Subco LLC, a related party, for fair market value consideration of $224.5 million, being the redemption amount of the shares acquired at $21.39 per share.

In the fourth quarter of 2019, BPYU issued 13,712,834 shares of Class B-1 Stock to BPR FIN 1 Subco LLC, a related party, due to a contribution of $293.3 million, equal to $21.39 per share.

In the third quarter 2020, BPYU issued 19,367,288 shares of Class B-1 Stock to BPR FIN I Subco LLC, a related party, due to total contributions of $414.3 million, equal to $21.39 per share.

During the three months ended March 31, 2021, BPYU issued 1,379,150 shares of Class B-21 Stock ~~Exchange~~to BPR FIN I Subco LLC, a related party, due to total contributions of $29.5 million, equal to $21.39 per share.

On June 26, 2019, following the effectiveness of the Restated Charter, certain subsidiaries of BPR FIN 1 Subco LLC, a related party, exchanged an aggregate of 121,203,654 shares of Class B-1 Stock held by such subsidiaries for 121,203,654 shares of Class B-2 Stock.35

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 "Pre-Merger Preferred Stock") at a price of $25.00 per share, resulting in net proceeds of $242.0 million after issuance costs. In connection with the BPY Transaction, each share of Pre-Merger Preferred Stock was converted into one share of 6.375% Series A cumulative redeemable preferred stock of BPYU (the "Series A Preferred Stock"). The Company's Series A Preferred Stock is listed on Nasdaq. Our Series A Preferred Stock has traded on Nasdaq under the symbol "BPYUP" since March 2, 2020, prior to which it traded under the symbol "BPRAP". The Series A 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 Class A Stock, and reduces net income available to stockholders, and therefore, earnings per share.

The Series A Preferred Stock does not have a stated maturity date but we may redeem the Series A Preferred Stock for $25.00 per share plus all accrued and unpaid dividends. Upon certain circumstances surrounding a change of control, holders of Series A Preferred Stock may elect to convert each share of their Series A Preferred Stock into a number of shares of Class A Stock or Class C Stock, at the option of the holder, equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 shares of Class A Stock or Class C Stock (subject to certain adjustments related to splits, subdivisions, or combinations). The BPY Transaction did not meet the definition of a change in control per the certificate of designation governing the Series A Preferred Stock.

Our Board of Directors declared preferred stock dividends during 2020 and 2019 as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

2020

November 5

December 15, 2020

January 1, 2021

0.3984

August 5

September 15, 2020

October 1, 2020

0.3984

May 7

June 15, 2020

July 1, 2020

0.3984

February 5

March 15, 2020

April 1, 2020

0.3984

2019

November 4

December 13, 2019

January 1, 2020

0.3984

August 1

September 13, 2019

October 1, 2019

0.3984

May 6

June 14, 2019

July 1, 2019

0.3984

February 6

March 15, 2019

April 1, 2019

0.3984

Table of Contents

Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

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 "Pre-Merger Preferred Stock") at a price of $25.00 per share, resulting in net proceeds of $242.0 million after issuance costs. In connection with the BPY Transaction of 2018, each share of Pre-Merger Preferred Stock was converted into one share of 6.375% Series A cumulative redeemable preferred stock of BPYU (the "Series A Preferred Stock"). The Company's Series A Preferred Stock is listed on Nasdaq. Our Series A Preferred Stock has traded on Nasdaq under the symbol "BPYUP" since March 2, 2020, prior to which it traded under the symbol "BPRAP". The Series A 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 Class A Stock, and reduces net income available to stockholders, and therefore, earnings per share.

The Series A Preferred Stock does not have a stated maturity date but we may redeem the Series A Preferred Stock for $25.00 per share plus all accrued and unpaid dividends. Upon certain circumstances surrounding a change of control, holders of Series A Preferred Stock may elect to convert each share of their Series A Preferred Stock into a number of shares of Class A Stock or Class C Stock, at the option of the holder, equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 shares of Class A Stock or Class C Stock (subject to certain adjustments related to splits, subdivisions, or combinations). The BPY Transaction of 2018 did not meet the definition of a change in control per the certificate of designation governing the Series A Preferred Stock.

Our Board of Directors declared preferred stock dividends during 2021 and 2020 as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

2021

May 6

June 15, 2021

July 1, 2021

0.3984

February 1

March 15, 2021

April 1, 2021

0.3984

2020

November 5

December 15, 2020

January 1, 2021

0.3984

August 5

September 15, 2020

October 1, 2020

0.3984

May 7

June 15, 2020

July 1, 2020

0.3984

February 5

March 15, 2020

April 1, 2020

0.3984

Accumulated Other Comprehensive Loss

The following table reflects the components of accumulated other comprehensive loss as of ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020:

September 30, 2020

September 30, 2019

March 31, 2021

March 31, 2020

Net unrealized gains on financial instruments

3081

12(10)

Foreign currency translation

(~~104~~99,~~351~~724)

(8799,~~530~~774)

AOCI - minority interest

1,~~722~~269

—

Accumulated other comprehensive loss

(~~102~~98,~~599~~374)

(8799,~~518~~784)

NOTE 10 EARNINGS PER SHARE

Class A Stock

Income available to Class A stockholders is limited to distributed income or dividends declared. Additionally, for purposes of allocating earnings to Class A Stock, the portion of the change in the carrying amount of Class A Stock that reflects a redemption in excess of fair value is considered a dividend to the Class A stockholders. As the Class A Stock redemption value approximates its fair value, basic and diluted earnings per share ("EPS") for Class A Stock is equivalent to the dividends declared for the period January 1, ~~2020~~2021 through ~~September~~March 3031, ~~2020~~2021. There were 6439,~~024~~127,~~422~~335 and 4138,~~743~~662,~~422~~115 shares of Class A Stock outstanding as of December 31, 2019 and September 30, 2020, respectively. EPS is not presented for Class B Stock, Series B Preferred Stock or Class C Stock as these classes of stock are not publicly traded.

~~NOTE 11 STOCK-BASED COMPENSATION PLANS~~36

The GGP Inc. 2010 Equity Plan (the "Equity Plan"), renamed as the Amended and Restated Brookfield Property REIT Inc. 2010 Equity Incentive Plan on August 28, 2018 in connection with the BPY Transaction, reserves for the issuance of 4% of outstanding Class A Stock 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"). The Company's directors, officers and other employees and those of its subsidiaries and affiliates are eligible for the 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 BPYU's Class A 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. In addition to the Equity Plan, effective February 20, 2019, the Brookfield Property Group Restricted BPR Class A Stock Plan and Brookfield Property L.P. FV LTIP Unit Plan (the "2019 Plans") provide for grants of Restricted Class A Shares of BPR, now BPYU, stock and FV LTIP Units of Brookfield Property L.P. respectively. Officers and employees of any member of the Brookfield Properties Group and of their respective affiliates are eligible for Awards under these plans.

In connection with the BPY Transaction, the Equity Plan was amended and certain outstanding awards were modified. All outstanding GGP in and out of the money options were canceled and replaced with Class A Stock of BPYU and BPY options, respectively. Certain existing appreciation only LTIP awards were canceled and replaced with substitute awards of a BPY affiliate. Outstanding restricted GGP shares were replaced with restricted shares of Class A Stock. As the awards were modified in conjunction with an equity restructuring, they were accounted for as modifications. Incremental compensation cost was measured as the excess of the fair value of the replacement awards over the fair value of the original awards immediately before the terms were modified. Total compensation cost measured at the date of modification was the grant-date fair value of the original awards for which the requisite service is expected to be rendered (or has already been rendered) plus the incremental cost associated with the replacement awards. For vested awards, incremental compensation cost was recognized on the modification date. For unvested awards, incremental compensation cost is being recognized over the remaining service period.

Table of Contents

Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

~~Compensation~~Stock ~~expense~~outstanding ~~related~~as toof ~~stock-based~~December 31, ~~compensation~~2020 ~~plans~~and ~~for~~March 31, ~~the~~2021, ~~three~~respectively. ~~and~~EPS ~~nine~~is ~~months~~not ~~ended~~presented ~~September 30~~for Class B Stock, ~~2020~~Series ~~and~~B ~~2019~~Preferred isStock ~~summarized~~or inClass ~~the~~C ~~following~~Stock ~~table~~as inthese ~~thousands:~~classes of stock are not publicly traded.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock options - Property management and other costs	$	—	$	10	$	—	$	40
Stock options - General and administrative	—		—		—		4
Restricted stock - Property management and other costs (1)	2,945		1,477		5,269		4,601
Restricted stock - General and administrative	802		508		2,051		1,268
LTIP Units - Property management and other costs	8		51		18		206
LTIP Units - General and administrative	15		204		36		1,578
Total	$	3,770	$	2,250	$	7,374	$	7,697

NOTE 11 STOCK-BASED COMPENSATION PLANS

~~(1) As~~The aGGP Inc. ~~part~~2010 ofEquity Plan (the ~~reduction~~"Equity inPlan"), ~~workforce~~renamed as the Amended and ~~early~~Restated ~~retirement~~Brookfield ~~plan~~Property ~~offers~~REIT Inc. 2010 Equity Incentive Plan on August 28, 2018 in connection with the ~~expense~~BPY Transaction of 2018, reserves for the issuance of 4% of outstanding Class A Stock on a fully diluted basis. The Equity Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, ~~acceleration~~other ~~occurred~~stock-based inawards and performance-based compensation (collectively, the ~~third~~"Awards"). ~~quarter~~The Company's directors, officers and other employees and those of its subsidiaries and affiliates are eligible for the Awards. ~~However~~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 ~~vesting~~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 ~~occur~~be ~~until~~less than the ~~fourth~~fair ~~quarter~~value ~~due~~of a share of BPYU's Class A Stock on the date of grant. The term of each option will be determined prior to ~~timing~~the date of grant, but may not exceed 10 years. In addition to the ~~agreements~~Equity Plan, effective February 20, 2019, the Brookfield Property Group Restricted BPR Class A Stock Plan and Brookfield Property L.P. FV LTIP Unit Plan (the "2019 Plans") provide for grants of Restricted Class A Shares of BPR, now BPYU, stock and FV LTIP Units of Brookfield Property L.P. respectively. Officers and employees of any member of the Brookfield Properties Group and of their respective affiliates are eligible for Awards under these plans.

~~The~~In ~~following~~connection ~~tables~~with ~~summarize~~the ~~stock~~BPY ~~option~~Transaction of 2018, the Equity Plan was amended and certain outstanding awards were modified. All outstanding GGP in and out of the money options were canceled and replaced with Class A Stock of BPYU and BPY options, respectively. Certain existing appreciation only LTIP ~~Unit~~awards were canceled and replaced with substitute awards of a BPY affiliate. Outstanding restricted ~~stock~~GGP ~~activity~~shares were replaced with restricted shares of Class A Stock. As the awards were modified in conjunction with an equity restructuring, they were accounted for as modifications. Incremental compensation cost was measured as the ~~Equity~~excess ~~Plan~~of ~~and~~the fair value of the ~~2019~~replacement ~~Plans~~awards over the fair value of the original awards immediately before the terms were modified. Total compensation cost measured at the date of modification was the grant-date fair value of the original awards for which the ~~nine~~requisite ~~months~~service ~~ended~~is ~~September~~expected 30to be rendered (or has already been rendered) plus the incremental cost associated with the replacement awards. For vested awards, ~~2020~~incremental ~~and~~compensation ~~2019:~~cost was recognized on the modification date. For unvested awards, incremental compensation cost is being recognized over the remaining service period.

	2020			2019
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Stock options Outstanding at January 1,	175,799	$	25.66	1,011,523	$	19.71
Granted	—	—		—	—
Exercised	—	—		(773,642)	17.91
Forfeited	—	—		(13)	26.05
Expired	(39,137)	24.30		—	—
Stock options Outstanding at September 30,	136,662	$	26.05	237,868	$	25.59

Compensation expense related to stock-based compensation plans for the three months ended March 31, 2021 and 2020 is summarized in the following table in thousands:

	2020				2019
	Three Months Ended March 31,
	Shares		Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
	2021		2020
LTIP Units Outstanding at January 1,	2,177,668		$	24.11	3,921,175	$	25.96
Stock options - Property management and other costs	$	—	$	—
Granted (1)	24,251		18.56		—	—
Stock options - General and administrative	—		—
Exercised	(54,540)		26.83		(1,715,722)	28.34
Restricted stock - Property management and other costs	1,294		851
Forfeited	—		—		(19,793)	22.42
Restricted stock - General and administrative	754		402
Expired	(271,463)		22.42		—	—
LTIP Units - Property management and other costs	8		3
LTIP Units Outstanding at September 30,	1,875,916		$	24.20	2,185,660	$	24.12
LTIP Units - General and administrative	15		6
Total	$	2,071	$	1,262

~~(1) Granted by an affiliated operating partnership of the Company.~~37

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

	2020			2019
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Restricted Stock Outstanding at January 1,	1,149,164	$	20.98	986,937	$	22.48
Granted	851,102	18.57		647,226	19.94
Vested	(256,329)	22.09		(401,528)	22.60
Forfeited	(66,585)	19.75		(39,776)	21.16
Restricted Stock Outstanding at September 30,	1,677,352	$	19.64	1,192,859	$	21.11

The following tables summarize stock option, LTIP Unit and restricted stock activity for the Equity Plan and the 2019 Plans for the three months ended March 31, 2021 and 2020:


	2021			2020
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Stock options Outstanding at January 1,	136,662	$	26.05	175,799	$	25.66
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	—
Expired (1)	(4,790)	26.05		—	—
Stock options Outstanding at March 31,	131,872	$	26.05	175,799	$	25.66

(1) The expired options shown expired in 2020 but were not reported until Q1 2021.


	2021			2020
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
LTIP Units Outstanding at January 1,	1,763,921	$	23.99	2,177,668	$	24.11
Granted (1)	—	—		24,251	18.56
Exercised	(42,013)	27.38		(35,820)	26.54
Forfeited	—	—		—	—
Expired	(296,190)	22.54		—	—
LTIP Units Outstanding at March 31,	1,425,718	$	24.20	2,166,099	$	24.00

(1) Granted by an affiliated operating partnership of the Company.


	2021			2020
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Restricted Stock Outstanding at January 1,	1,414,558	$	19.48	1,149,164	$	20.98
Granted	910,721	18.53		851,102	18.57
Vested	(378,135)	20.13		(255,801)	22.08
Forfeited	(55,670)	19.04		(36,400)	19.94
Restricted Stock Outstanding at March 31,	1,891,474	$	18.90	1,708,065	$	19.63

NOTE 12 ACCOUNTS RECEIVABLE, NET

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

September 30, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Trade receivables

~~484~~248,~~046~~513

~~111~~384,~~582~~464

Short-term tenant receivables

6,~~271~~446

46,~~198~~703

Straight-line rent receivable

~~158~~202,~~519~~969

~~144~~188,~~249~~950

Other accounts receivable

314,~~334~~680

214,~~725~~894

Total accounts receivable

~~652~~472,~~170~~608

~~262~~595,~~754~~011

Provision for doubtful accounts

(8866,~~558~~367)

(2770,~~826~~029)

Total accounts receivable, net

~~563~~406,~~612~~241

~~234~~524,~~928~~982

For leases where collectability of substantially all the lease payments is probable, the Company records an allowance for doubtful accounts against the portion of accounts receivable, net, including straight-line rents, which is estimated to be uncollectible to account for portfolio-level collection issues. The Company estimates the allowance based on previous recovery experience and expectations of future lease concessions, in consideration of weighted average remaining lease terms and the period of time elapsed on such lease terms. Changes in the allowance is recognized in rental income in our Consolidated Statements of Operations and Comprehensive Income (Loss). 38

NOTE 13 NOTES RECEIVABLE

The following table summarizes the significant components of notes receivable.

	September 30, 2020		December 31, 2019
Notes receivable	$	40,566	$	69,963
Accrued interest	4,006		6,347
Total notes receivable	$	44,572	$	76,310

On December 20, 2019 the Company issued a $31.7 million subordinated unsecured note to an institutional investor. The note was repaid in full on January 7, 2020.

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Receivables related to legally executed rent deferrals are presented within trade receivables in the table above.

At the time of the legal execution of a lease concession that abates previously recognized trade receivables, such amounts (net of estimated lease concessions previously recognized in the provision for doubtful accounts) are reclassified to straight-line rent receivables. Refer to Notes 2 and 7 for additional information regarding the Company's consideration of the collectability of accounts receivable.

NOTE 13 NOTES RECEIVABLE

The following table summarizes the significant components of notes receivable.


	March 31, 2021		December 31, 2020
Notes receivable	$	34,011	$	40,999
Accrued interest	4,233		4,554
Total notes receivable	$	38,244	$	45,553

During the three months ended March 31, 2021, the Company wrote off notes receivable deemed uncollectible in the amount of $7.9 million.

NOTE 14 PREPAID EXPENSES AND OTHER ASSETS

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

September 30, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Gross Asset

AccumulatedAmortization

Balance

Gross Asset

AccumulatedAmortization

Balance

Intangible assets:

Above-market tenant leases, net

~~152~~128,~~078~~754

(6855,~~651~~144)

8373,~~427~~610

~~177~~133,~~480~~220

(7954,~~467~~922)

9878,~~013~~298

Real estate tax stabilization agreement, net

111,506

(6265,~~438~~594)

4945,~~068~~912

111,506

(5764,~~704~~016)

5347,~~802~~490

Total intangible assets

~~263~~240,~~584~~260

(~~131~~120,~~089~~738)

~~132~~119,~~495~~522

~~288~~244,~~986~~726

(~~137~~118,~~171~~938)

~~151~~125,~~815~~788

Remaining prepaid expenses and other assets:

Restricted cash

93231,~~442~~895

77164,~~683~~069

Security and escrow deposits

1,~~303~~164

1,~~259~~160

Prepaid expenses

4331,~~694~~276

2745,~~632~~266

Other non-tenant receivables

6563,~~543~~229

5670,~~948~~916

Operating lease right of use assets, net

~~394~~390,~~987~~263

~~402~~392,~~573~~634

Finance lease right of use assets, net

7,~~899~~847

7,~~995~~873

Other

1821,~~469~~003

1920,~~155~~040

Total remaining prepaid expenses and other assets

~~625~~746,~~337~~677

~~593~~701,~~245~~958

Total prepaid expenses and other assets

~~757~~866,~~832~~199

~~745~~827,~~060~~746

4639

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 15 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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

September 30, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Gross Liability

AccumulatedAccretion

Balance

Gross Liability

AccumulatedAccretion

Balance

Intangible liabilities:

Below-market tenant leases, net

~~227~~201,~~451~~969

(6461,~~897~~879)

~~162~~140,~~554~~090

~~218~~222,~~608~~432

(5672,~~893~~364)

~~161~~150,~~715~~068

Total intangible liabilities

~~227~~201,~~451~~969

(6461,~~897~~879)

~~162~~140,~~554~~090

~~218~~222,~~608~~432

(5672,~~893~~364)

~~161~~150,~~715~~068

Remaining accounts payable and accrued expenses:

Accrued interest

6692,~~955~~993

4263,~~371~~693

Accounts payable and accrued expenses

~~100~~64,~~400~~421

7183,~~720~~041

Accrued real estate taxes

8266,~~845~~756

5376,~~210~~401

Deferred gains/income

8599,~~762~~216

8594,~~598~~752

Accrued payroll and other employee liabilities

6530,~~876~~480

6157,~~002~~134

Construction payable

~~265~~253,~~716~~425

~~301~~272,~~096~~080

Tenant and other deposits

1514,~~221~~754

1514,~~078~~644

Insurance reserve liability

12,~~433~~477

12,~~787~~793

Finance lease obligations

9,093

9,~~094~~093

Conditional asset retirement obligation liability

2,~~528~~375

32,~~275~~342

Lease liability right of use

7573,~~828~~902

7874,~~500~~896

Other

7975,~~833~~562

~~131~~82,~~684~~680

Total remaining Accounts payable and accrued expenses

~~862~~795,~~490~~454

~~865~~843,~~415~~549

Total Accounts payable and accrued expenses

1935,~~025,044~~544

1993,~~027,130~~617

NOTE 16 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.

The Company is subject to litigation related to the BPY Transaction of 2018. The Company cannot predict the outcome of pending litigation, nor can it predict the amount of time and expense that will be required to resolve such litigation.

4740

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Brookfield Property REIT Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 17 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 (~~Loss):

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2020		2019		2020		2019
	2021		2020
	(Dollars in thousands)
Contractual rent expense, including participation rent	$	4,~~254~~314	$	3,~~475~~310	$	~~13,249~~	$	~~9,667~~
Contractual rent expense, including participation rent and excluding amortization of above and below-market ground leases and straight-line rent	3,~~315~~376		3,~~475~~310		~~9,805~~		~~9,667~~

The future impact of the shutdown on our level of liquidity is uncertain at this time. Measures undertaken by governments and companies in our principal markets have resulted in the temporary closure of many of our operating assets with the vast majority of the assets now open. The duration of such measures may impact our ability to collect rental income in our retail assets. The longer-term impact of the pandemic and resulting economic downturn could reduce demand for retail space.

Consequently, we are reviewing, and where appropriate adjusting, our current capital expenditure and financing assumptions on existing and future projects to reflect any potential shorter- and longer-term impact of the global economic shutdown.

We are also reviewing contractual arrangements with our tenants to assess the rights and responsibilities of the Company and our tenants in response to the impact of the measures undertaken by governments and/or tenants. Potential responses may include, but are not limited to, extension of payment terms from tenants, adjustments to the duration of leases, payment holidays, and renegotiation of lease terms.

We expect to be able to refinance the majority of debt obligations maturing in the near term or to exercise contractual extension options thereon, although there is no guarantee we will be able to do so. In certain instances, we plan to seek certain modifications to mortgages, including lease restructuring approvals and technical default waivers, and potentially interest deferrals.

In addition, certain debt obligations are subject to financial covenants. As a result, in the shorter-term, the global economic shutdown may negatively impact our ability to meet such covenants. We are reviewing the financial covenants of each debt instrument and, where applicable, working with our lenders to address debt instruments which may potentially approach or breach covenant limits. Such adjustments may include, but are not limited to, adjustment to the covenant limits, interest payment holidays, and temporary suspension of covenant testing.

In order to maintain financial flexibility, we maintain capacity under the Facility. As of ~~September~~March 3031, ~~2020~~2021, the available liquidity under such credit facility was $~~580~~515.0 million. We believe we will be able to continue to borrow funds on the Facility when and as required.

NOTE 18 SUBSEQUENT EVENTS

~~Subsequent~~On toApril ~~September 30~~16, ~~2020~~2021, ~~the~~BPYU ~~Company~~issued ~~repurchased 2~~9,~~613~~911,~~565~~174 shares of Class AB-1 Stock atto anBPR ~~average~~FIN ~~purchase~~I ~~price~~Subco ofLLC, ~~$13.32~~a ~~per~~related ~~share~~party, ~~for~~due anto ~~aggregate~~total ~~cost~~contributions of ~~approximately~~ $34212.8 0 million, equal to $21.39 per share.

~~Subsequent~~On toApril ~~September 30~~20, ~~2020~~2021, ~~the~~we ~~Company~~completed ~~issued~~a ~~1,469,319~~three ~~shares~~year extension, of ~~Class~~a B-$1.0 billion ~~Stock~~loan atsecured by cross-collateralized mortgages on 16 properties with an ~~average~~interest ~~price~~rate of ~~$21.39~~LIBOR ~~per~~plus ~~share~~3.25%, ~~for~~which ~~total~~matures ~~aggregate~~on ~~proceeds~~April 20, 2024. As part of the negotiations, certain hurdles need to be met after the initial two year term to warrant another year extension. The transaction included a $31240.40 million pay down and secures an additional property as collateral.

On ~~October~~April 3023, ~~2020~~2021, we completed the ~~Company~~sale ~~conveyed~~of ~~one~~35% ~~property~~interest toin ~~the~~Shopping ~~lender~~Leblon infor ~~satisfaction~~a gross sale price of $5985.~~0 million~~2 ~~in outstanding debt~~million.

48On April 27, 2021, we paid off the Term A-1 loan in the amount of $21.0 million.

~~Table~~On April 27, 2021, we made a principal payment in the amount of ~~Contents~~$48.1 million on the Term A-2 loan. The remaining outstanding balance is $1,952.0 million.

~~Brookfield~~On ~~Property~~April ~~REIT~~29, 2021, we secured a $100.0 million note with Brookfield BPY Holdings Inc., a related party. The note was used to pay down our Facility. We expect to repay the note in full during the second quarter of 2021.

~~NOTES~~On TOMay ~~CONSOLIDATED~~6, ~~FINANCIAL~~2021, ~~STATEMENTS~~the Company closed on a new loan at Whalers Village in the amount of $83.5 million with an interest rate of LIBOR plus 2.5%, which matures on May 4, 2024.

~~(Dollars in thousands, except share and per share amounts)~~41

(Unaudited)

On November 6, 2020, the Company extended its forbearance agreement related to the loan at The Mall in Columbia until November 23, 2020 while replacement financing is finalized. A principal repayment of $28.0 million was made in conjunction with the extension.

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Quarterly Report and ~~which~~whose descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as in such Notes.

Brookfield Property REIT Inc. ("the Company" or "BPYU") is an indirect subsidiary of Brookfield Property Partners L.P. ("BPY"), one of the world's largest commercial real estate companies. As used herein, the terms "we", "us" and "our" refer to BPYU and its subsidiaries. BPYU, through its subsidiaries and affiliates, is an owner and operator of retail properties.

Overview—Introduction

We own a property portfolio comprised primarily of Class A regional malls (defined primarily by sales per square foot). As of ~~September~~March 3031, ~~2020~~2021, we were the owner, either entirely or with joint venture partners, of ~~122~~119 retail properties located throughout the United States comprising approximately ~~120~~117 million square feet of gross leasable area, or GLA.

Our primary objective is to be an owner and operator of best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers and consumers. WeOur ~~operate~~strategy our business to achieve this objective with a long term view and will continue to make decisions with that in mind, however, we will caution that in light of the novel coronavirus pandemic ("COVID-19" or "the global economic shutdown" or "the shutdown") and its impact on the global economy, we may be unable to achieve these objectives in the near term. includes:

Our strategy includes:

•increasing the permanent occupancy of our regional mall portfolio by converting temporary leases to permanent leases and leasing vacant space;

•renewing or replacing expiring leases at greater rental rates;

•actively recycling capital through the disposition of assets; investing in whole or partial interests in high-quality regional malls, anchor pads, and our development pipeline and repaying debt; and

•continuing to execute on our existing redevelopment projects and seeking additional opportunities within our portfolio for redevelopment.

Despite the recent economic disruption caused by COVID-19, we expect that the high quality nature of our stabilized properties and associated cash flows will continue to be in demand from investors, although our ability to execute on recycling of capital initiatives will likely be impacted in the short term.

As of ~~September~~March 3031, ~~2020~~2021, the portfolio was 9391.45% leased, compared to 95.04% leased at ~~September~~March 3031, ~~2019~~2020. On a suite-to-suite basis, the leases commencing occupancy in the trailing 12 months exhibited initial rents that were 40.53% ~~higher~~lower than the final rents paid on expiring leases.

Overview—BPY Transaction of 2021

On April 1, 2021, Brookfield Asset Management Inc. (“Brookfield Asset Management” or “BAM”) announced an agreement to acquire all of the limited partnership units of BPY that it does not already own (“BPY units”) at a value of $18.17 per BPY unit, or $6.5 billion in total value (the “BPY Transaction”). Under the agreement, BPY unitholders are expected to have the ability to elect to receive, per BPY unit and subject to pro ration, a combination of (i) 0.3979 Class A limited voting shares of BAM (“Brookfield Shares”), (ii) $18.17 in cash, and/or (iii) 0.7268 of BPY preferred units with a liquidation preference of $25.00 per unit. Pro-ration will be based on a maximum cash consideration of approximately 50% of the total value of the BPY units ($3.27 billion in total cash payable to public unitholders), a maximum amount of Brookfield Shares equal to approximately 42% of the total value of the BPY units (59.3 million Brookfield Shares payable to public unitholders), and a maximum amount of BPY preferred units with a liquidation value of approximately 8% of the total value of the BPY units ($500 million in liquidation preference of BPY preferred units payable to public unitholders).

In accordance with the terms of the Company’s charter, any holders of the Company’s Class A stock (“BPYU Shareholders”) at the closing of the BPY Transaction will receive the same per share consideration as will be received by BPY unitholders who have not made an election, being a combination of approximately 50% cash, 42% Brookfield Shares and 8% BPY preferred units (subject to pro-ration) (the “Default Consideration”). The aggregate consideration of $6.5 billion payable to BPY

unitholders in the BPY Transaction includes the amount payable to the public holders of shares of the Company’s Class A Stock. BPYU Shareholders will not be entitled to any other consideration or payment in connection with the BPY Transaction, the BPY Transaction will not be subject to a vote of BPYU Shareholders and BPYU Shareholders will not be entitled to appraisal rights.

Any BPYU Shareholders who wish to elect their preferred form of consideration rather than the Default Consideration, vote in favor of or against the BPY Transaction and/or exercise dissent rights in respect of the BPY Transaction, may convert their shares of Company Class A Stock into BPY units (pursuant to the terms of the Company’s charter) before the election deadline if they wish to make an election and/or before the record date for the meeting of BPY unitholders if they wish to vote in favor of or against the BPY Transaction or exercise dissent rights. To exercise dissent rights, BPY units must be held in registered form. The election deadline and the meeting record date have yet to be determined and such dates will be publicly announced by BPY once set. Additional information on the BPY Transaction, including the circular pertaining to the BPY Transaction and announcements regarding the election deadline and the meeting record date, will be posted on the BPY website at https://bpy.brookfield.com/reports-and-filings/regulatory-filings when filed with the SEC. The information on BPY’s website is not a part of or incorporated by reference into this Quarterly Report on Form 10-Q or the Company’s other filings with the SEC.

If the BPY Transaction is approved by the BPY unitholders and closes, the shares of the Company’s Class A Stock shall no longer be deemed outstanding and all of the BPYU Shareholder’s rights as stockholders of the Company shall terminate. The Company’s Class A Stock will also no longer trade on the Nasdaq Global Select Market after the close of the BPY Transaction. If the BPY Transaction is not approved by the BPY Unitholders or otherwise fails to close, the Company’s Class A Stock will remain outstanding.

It is also expected that the BPYU 6.375% Series A Cumulative Redeemable Preferred Stock will be redeemed at its par value of $25.00 per share, plus any accrued and unpaid dividends, at or around the closing of the BPY Transaction.

Overview—Financial

The COVID-19 pandemic has spread globally, and has caused a global economic shutdown. The actions taken in response to the shutdown have interrupted business activities and supply chains; disrupted travel; contributed to significant volatility in the financial markets, resulting in a general decline in equity prices and lower interest rates; impacted social conditions; and adversely impacted local, regional, national and international economic conditions, as well as the labor markets. Accordingly, we caution you that our financial position and consolidated performance presented below may not be indicative of our results in future periods as a result of the ongoing and developing COVID-19 pandemic and its resulting impact on the global economy.

Net loss attributable to BPYU increased from $~~229~~81.08 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2019~~2020 to $~~461~~229.51 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021 primarily due to the increase in equity in loss of unconsolidated real estate affiliates and the decrease in gains on the sale of unconsolidated properties from the three months ended March 31, 2020 compared to the three months ended March 31, 2021.

affiliates and the decrease in gains on the sale of unconsolidated properties from the nine months ended September 30, 2019 compared to the nine months ended September 30, 2020.

See Non-GAAP Supplemental Financial Measures below for a discussion of funds from operations ("FFO"), along with a reconciliation to Net (loss) income attributable to BPYU.

Operating Metrics

The following table summarizes selected operating metrics for our portfolio.

	September 30, 2020 (1)			September 30, 2019 (1)
	March 31, 2021 (1)			March 31, 2020 (1)
In-Place Rents Per Square Foot (all less anchors) (2)	$	8182.0894		$	7980.9592
In-Place Rents Per Square Foot (<10K square feet) (2)	$	61.8779		$	6162.8828
Percentage Occupied for Total Retail Properties	9290.86		%	9394.65		%
Percentage Leased for Total Retail Properties	9391.45		%	95.04		%

(1) Metrics exclude properties acquired in the year ended December 31, ~~2019~~2020 and the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, reductions in ownership as a result of sales or other transactions, and certain redevelopments and other properties.

(2) Rent is presented on a cash basis and consists of base minimum rent and common area costs.

Lease Spread Metrics

The following table summarizes signed leases compared to expiring leases in the same suite, for leases where (1) the downtime between new and previous tenant was less than 24 months, (2) the occupied space between the previous tenant and new tenant did not change by more than 10,000 square feet and (3) the new lease is at least a year.

			# of Leases						SF (in thousands)						Term (in years)						Initial Rent PSF (1)						Expiring Rent PSF (2)						Initial Rent Spread						% Change
Trailing 12 Month Commencements			~~870~~526						31,~~109~~788						6.63						$	5251.1456					$	4951.9082					$	2(0.2417)					4(0.53)		%

(1) Represents initial annual rent over the lease consisting of base minimum rent and common area maintenance.

(2) Represents expiring rent at end of lease consisting of base minimum rent and common area maintenance.

Results of Operations

Three months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020

Rental revenues ~~increased~~decreased $924.29 million, primarily due to the ~~acquisition~~net impact of anCOVID ~~additional~~rent ~~interest~~relief ~~in four operating properties in the fourth quarter~~ of ~~2019. The acquisition resulted in a~~ $4336.42 million ~~increase~~ in ~~Rental Revenues during~~ the ~~third~~first quarter of ~~2020~~2021, ~~compared~~which torelated ~~the~~primarily ~~third~~to ~~quarter~~2020 ~~of 2019~~rents. This is partially offset bydue to the ~~provision for doubtful accounts, resulting in a~~ $329.25 million ~~decrease~~increase ~~from~~in termination income in the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020.

~~Real~~Management ~~estate~~fees ~~taxes~~and ~~increased~~other corporate revenue decreased $7.3.8 million, primarily due to ~~the~~a ~~acquisition~~decrease ~~of an additional interest~~ in ~~four~~gross ~~operating~~receipts ~~properties~~across in the ~~fourth~~portfolio ~~quarter of 2019. The acquisition resulted in a $4.7 million increase in real estate taxes~~ during the ~~third~~first quarter of ~~2020~~2021 compared to the ~~third~~first quarter of ~~2019~~2020.

~~The~~Provision ~~provision~~for ofnote ~~impairment~~receivable loss of $387.89 million during the ~~third~~first quarter of ~~2019~~2021 is primarily related to anthe ~~impairment~~write ~~charge~~off ~~recorded~~of ona ~~one~~note ~~operating~~from ~~property~~our ~~(Note~~joint ~~2).~~venture ~~There~~partner ~~were~~that nowas ~~operating~~deemed ~~property impairment charges during the third quarter of 2020~~uncollectible.

~~Depreciation~~The ~~and~~provision ~~amortization~~of ~~increased~~impairment of $45107.0 million, ~~primarily~~during ~~due~~the first quarter of 2021 is related to ~~the~~an ~~acquisition~~impairment charges recorded on three operating properties. Specifically, $77.5 million of animpairment ~~additional~~was ~~interest~~recognized infor ~~four~~two operating properties inwhere the ~~fourth~~Company’s ~~quarter~~expected ofholding ~~2019.~~period ~~The~~for ~~acquisition~~the ~~resulted~~assets inchanged due to an increased probability of a near-term disposition and $3029.5 million ~~increase~~of inimpairment ~~depreciation~~was ~~and~~recognized ~~amortization~~based ~~during~~on an update to the ~~third~~Company’s ~~quarter~~estimated probability of ~~2020~~obtaining ~~compared~~concessions tofrom the ~~third~~creditor ~~quarter~~at ofan ~~2019~~operating property for which the Company has suspended funding equity contributions to make contractual interest and/or principal payments.

Gain ~~from~~on ~~changes~~extinguishment ~~in control~~ of ~~investment~~debt ~~properties~~ of $3913.71 million ~~during the third quarter of 2019~~ is related to the ~~acquisition~~conveyance of ~~an additional~~ interest atof one operating property that occurred in the first quarter of 2021 (Note 3). The property was one of the properties where the Company strategically skipped debt service during 2020.

51Equity in loss of Unconsolidated Real Estate Affiliates decreased $29.6 million during the first quarter of 2021, primarily related to the loss of revenues across the unconsolidated joint ventures. Additionally, there was an impairment charge of $3.4 million recorded on one unconsolidated operating property (Note 5).

~~Loss~~Unconsolidated Real Estate Affiliates - loss on ~~extinguishment~~investment ofduring ~~debt~~the offirst ~~$27.5~~quarter ~~million~~of 2021 is ~~related~~primarily due to the ~~pre~~conveyance of interest of one unconsolidated joint venture. The Unconsolidated Real Estate Affiliates -~~payment~~ ~~penalty~~gain ~~related~~on toinvestment during the ~~refinancing~~three ofmonths ~~debt~~ended atMarch 31, ~~one~~2020 ~~property~~is ~~that~~primarily ~~occurred~~due into the ~~third~~sales ~~quarter~~ of ~~2019~~remaining interests in ABG and Aeropostale (Note 63).

Benefit from (provision for) income taxes decreased $19.8 million, primarily due to the recognition of deferred taxes related to certain transactions effectuated in the BPY Transaction in 2019

Equity in loss of Unconsolidated Real Estate Affiliates increased $60.3 million during the third quarter of 2020, primarily related to decreased revenues in unconsolidated joint ventures. Additionally, impairment charges of $2.5 million were recorded on one operating property (Note 5).

Unconsolidated Real Estate Affiliates - gain on investment during the third quarter of 2019 is due to the 49.3% sale of our interest in Authentic Brands Group LLC ("ABG") (Note 3).

Nine months ended September 30, 2020 and 2019

Rental revenues increased $64.9 million, primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $139.2 million increase in Rental Revenues during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. This is partially offset by the provision for doubtful accounts, resulting in $48.2 million decrease during the nine months ended September 30, 2019 compared to the nine months ended September 30, 2019.

Real estate taxes increased $20.6 million, primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $14.1 million increase in real estate taxes during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The provision for impairment of $71.5 million during the nine months ended September 30, 2020 is related to an impairment charges recorded on one operating property and the provision of impairment of $223.1 million during the nine months ended September 30, 2019 is related to impairment charges recorded on two operating properties (Note 2).

Depreciation and amortization increased $128.0 million, primarily due to the acquisition of an additional interest in four operating properties in the fourth quarter of 2019. The acquisition resulted in a $103.0 million increase in depreciation and amortization during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

Loss from changes in control of investment properties of $15.4 million during the nine months ended September 30, 2020 is related to the acquisition of an additional interest at one operating property (Note 3). The gain from changes in control of investment properties of $39.7 million during the nine months ended September 30, 2019 is related to the acquisition of an additional interest at one operating property (Note 3).

The gain on extinguishment of debt of $14.3 million during the nine months ended September 30, 2020 is related to the debt buyback transactions that occurred in the second quarter of 2020 (Note 6). The loss on extinguishment of debt of $27.5 million during the nine months ended September 30, 2019 is due to a pre-payment penalty related to the refinancing of debt at one property (Note 6).

Benefit from income taxes decreased $10.7 million, primarily due to the recognition of deferred taxes related to certain transactions effectuated in the BPY Transaction in 2019.

Equity in loss of Unconsolidated Real Estate Affiliates of $105.4 million during the nine months ended September 30, 2020 is primarily related to impairment charges on three operating properties (Note 5) and a loss of revenues.

Unconsolidated Real Estate Affiliates - gain on investment during the nine months ended September 30, 2020 is primarily due to the sales of remaining interests in ABG and Aero OpCo LLC (Note 3). The Unconsolidated Real Estate Affiliates - gain on investment during the nine months ended September 30, 2019 relates to the sale of our 12.0% interest in Bayside Marketplace and the 49.3% sale of our interest in ABG (Note 3).

Liquidity and Capital Resources

Our primary source of cash is from the ownership and management of our properties and strategic dispositions. In addition, we will also use financings as a source of capital. We may generate cash from refinancings or borrowings under our revolving credit facility (the "Facility"). Our primary uses of cash include payment of operating expenses, debt service, reinvestment in and redevelopment of properties, tenant allowances, dividends, share repurchases and strategic acquisitions.

We anticipate maintaining financial flexibility by managing our future maturities and amortization of debt coming due at the corporate and property levels. At March 31, 2021, we have debt coming due of $3.9 billion in the next twelve months. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $~~173~~189.32 million of consolidated unrestricted cash and $~~580~~515.0 million of available capacity under our revolving credit facility as of ~~September~~March 3031, ~~2020~~2021, as well as anticipated cash provided by operations.

Our key financing objectives include:

•to obtain property-secured debt with laddered maturities; and

•to minimize the amount of debt that is cross-collateralized and/or recourse to us.

We may raise capital through public or private issuances of debt securities, preferred stock, Class A Stock, Common Units of BPR OP, LP ("BPROP"), or other capital raising activities. In addition, we or our affiliates may repurchase our shares or corporate debt and bonds.

The future impact of the global economic shutdown on our level of liquidity is uncertain at this time. Measures undertaken by governments and companies in our principal markets have resulted in the temporary closure of many of our operating assets with the vast majority of the assets now open. The duration of such measures may impact our ability to collect rental income in our retail assets. The longer-term impact of the shutdown and resulting economic downturn could reduce demand for retail space.

In addition, certain debt obligations are subject to financial covenants. As a result, in the shorter-term, the shutdown may negatively impact our ability to meet such covenants. We are reviewing the financial covenants of each debt instrument and, where applicable, working with our lenders to address debt instruments which may potentially approach or breach covenant limits. Such adjustments may include, but are not limited to, adjustment to the covenant limits, interest payment holidays, and temporary suspension of covenant testing.

In order to maintain financial flexibility, we maintain capacity under our Facility. As at ~~September~~March 3031, ~~2020~~2021, the available capacity under such credit facility was $~~580~~515.0 million. We believe we will be able to continue to borrow funds on the Facility when and as required.

The Company entered into a new credit agreement (the "Credit Agreement") dated as of August 24, 2018 consisting of the Facility, Term A-1 and A-2 loans, and a Term B loan. The Facility provides for revolving loans of up to $1.5 billion and borrowings bear interest at a rate equal to LIBOR plus 2.25%. The Facility is scheduled to mature in August 2022 and had outstanding borrowings of $~~920~~985.0 million as of ~~September~~March 3031, ~~2020~~2021. The Term A-1 Loan has a total commitment outstanding of $900.0 million, with $700.0 million attributable to BPYU and $200.0 million attributable to an affiliate, and is scheduled to mature in August 2021, bearing interest at a rate equal to LIBOR plus 2.25%. During the quarter ended ~~September~~March 3031, ~~2020~~2021, the Company ~~didn't~~made ~~make~~a principal ~~payments~~payment in the amount of $4.8 million, and the remaining outstanding balance was $3421.80 million. The Term A-2 Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2023, bearing interest at a rate equal to LIBOR plus 2.25%, and the outstanding balance at ~~September~~March 3031, ~~2020~~2021 was $2.0 billion. The Term B Loan has a total commitment outstanding of $2.0 billion and is scheduled to mature in August 2025 bearing interest at a rate equal to LIBOR plus 2.50 %. During the quarter ended ~~September~~March 3031, ~~2020~~2021, the Company made a principal payment in the total amount of $5.0 million. The total outstanding balance of the Term B Loan as of March 31, 2021 was $1,945.0 million. The Term A-1, A-2, and B Loans are contractually obligated to be prepaid through net proceeds from property level refinances and asset sales as outlined in the Credit Agreement.

$5.0 million. The total outstanding balance of the Term B Loan as of September 30, 2020 was $1,955.0 million. The Term A-1, A-2, and B Loans are contractually obligated to be prepaid through net proceeds from property level refinances and asset sales as outlined in the Credit Agreement.

On July 29, 2020, the Company entered into the First Amendment of its Credit Agreement in order to give effect to certain amendments, including, but not limited to the following:

•The Company agreed to maintain an ongoing liquidity covenant (set at $500 million) which will be tested as of the last day of each month against the amount of unrestricted cash, undrawn available amounts under the Facility and undrawn amounts under the new Brookfield Liquidity Facility. The Company will enter into and maintain a $500 million Brookfield Liquidity Facility (the “Brookfield Liquidity Facility”) and prior to the date the Company demonstrates ~~compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment, any interest and principal payments thereunder must be paid-in-kind.~~

compliance with the financial covenants in effect under the Credit Agreement prior to the First Amendment, any interest and principal payments thereunder must be paid-in-kind.

•The Company will also be required to make additional prepayments of the Term A loans with proceeds of certain equity, debt issuances and asset sales.

As of ~~September~~March 3031, ~~2020~~2021, we are not aware of any instances of non-compliance with such covenants. Though there is potential for a risk of default ~~(See Note 17 for discussion specific to COVID-19)~~, in the event the Company fails to maintain compliance with its financial covenants, the Credit Agreement provides for a cure period, during which the Company has the opportunity to raise additional cash and reduce net debt balance, such as through capital contributions from BPY, or disposition of assets. Management has determined that in the event of a default, it is probable that these market-based alternatives would be available, and that these actions would provide the necessary cash flows to prevent or cure an event of default, although there is no guarantee that these market-based alternatives would be available.

OnDuring ~~May~~the 24three months ended March 31, ~~2020~~2021, the Company ~~executed~~suspended aequity ~~series~~contributions ofto ~~transactions~~make tocontractual ~~repurchase~~interest ~~corporate~~and/or ~~debt~~principal payments on thirteen consolidated and unconsolidated property level mortgages, including one mortgage that is in maturity default. During the ~~open~~year ~~market~~ended December 31, ~~funded~~2020, byCompany ~~intercompany~~suspended ~~loans~~equity ~~from~~contributions ~~BPY~~to make contractual interest and/or principal payments on eighteen consolidated and unconsolidated property level mortgages, including one mortgage that is in maturity default. The ~~total~~Company ~~amounts~~is ofcurrently ~~debt~~engaging ~~repurchased~~in ~~had~~negotiations awith ~~par~~the ~~value~~creditors ofon ~~$59.6 million,~~these ~~and~~mortgages ato ~~cash~~obtain ~~repurchase~~potential ~~price~~lender ofconcessions ~~$45~~or other relief.~~3 million.~~ ~~Following~~If ~~each~~the ~~repurchase~~Company is unsuccessful in obtaining concessions from these creditors, it is possible that the ~~repurchased~~property ~~debt~~securing ~~was~~these ~~formally~~loans ~~cancelled~~would be transferred to the lenders. AsIn asuch ~~result~~circumstances, the carrying value of the ~~debt~~property ~~repurchase~~may no longer be recoverable and ~~cancellation,~~may trigger an impairment charge. These mortgages are non-recourse and the creditors do not have security claims against the Company ~~recognized~~aside afrom ~~gain~~the ofcollateral property. During the three months ended March 31, 2021, the Company accrued $1413.32 million ~~included~~of indefault ~~gain~~interest onrelated ~~extinguishment~~to ofthese ~~debt~~mortgages onper ~~the~~contractual ~~Consolidated~~debt ~~Statements~~agreements. As of ~~Operations~~December 31, ~~and~~2020, ~~Comprehensive~~the ~~Income~~Company ~~(Loss)~~has ~~for~~accrued ~~the~~$46.6 million ~~nine~~of ~~months~~default ~~ended~~interest ~~September~~related ~~30,~~to ~~2020~~these mortgages per contractual debt agreements.

54As of March 31, 2021, the Company has suspended equity contributions to make contractual interest and/or principal payments on a total of $1.2 billion of property level mortgages and the related Investment in Real Estate securing these loans has a carrying value of $1.1 billion.

~~During~~As ~~the~~of ~~nine~~January ~~months ended September 30~~1, ~~2020~~2021, the Company ~~suspended~~conveyed ~~equity~~North ~~contributions~~Point Mall to make contractual interest and/or principal payments on eighteen consolidated and unconsolidated property level mortgages, including one mortgage that is in maturity default. The Company is currently engaging in negotiations with the ~~creditors on these mortgages to obtain potential~~ lender ~~concessions~~in orsatisfaction ~~other~~of ~~relief~~$247.0 million ~~If the Company is unsuccessful~~ in ~~obtaining~~outstanding ~~concessions from these creditors, it is possible that the property securing these loans would be transferred to the lenders~~debt. ~~In such circumstances~~Accordingly, the ~~carrying value of the property may no longer be recoverable and may trigger an impairment charge. These mortgages are non-recourse and the creditors do not have security claims against the~~ Company ~~aside~~recognized ~~from~~a ~~the~~gain ~~collateral property. In total, as~~ of ~~September~~$13.1 ~~30,~~million ~~2020,~~included ~~the~~in ~~Company~~gain ~~has~~on ~~suspended~~extinguishment ~~equity~~of ~~contributions~~debt ~~to make contractual interest and/or principal payments~~ on aour ~~total~~Consolidated ofStatements ~~$1.8 billion~~ of ~~property~~Operations ~~level mortgages~~ and ~~the~~Comprehensive ~~related~~Loss ~~Investment~~for inthe ~~Real~~three ~~Estate~~months ~~securing~~ended ~~these~~March ~~loans~~31, ~~has a carrying value of $1~~2021.~~9 billion.~~

OnAs ~~April~~of 24January 1, ~~2020~~2021, the Company ~~completed~~conveyed aFlorence ~~one-year~~Mall ~~extension~~to ofthe alender ~~$1.3~~in ~~billion~~satisfaction ~~loan secured by cross-collateralized mortgages on 15 properties with an interest rate~~ of ~~LIBOR plus 1~~$90.~~75%,~~0 million ~~which~~in ~~matures~~outstanding ondebt. ~~April 25~~Accordingly, ~~2021.~~the AnCompany ~~extension~~recognized ~~fee~~a loss of $14.6 2 million ~~was~~included ~~paid~~ in ~~conjunction~~Unconsolidated ~~with~~Real ~~the~~Estate ~~extension.~~Affiliates - gain (loss) on

~~On February 28~~investment, ~~2020,~~net ~~the~~on ~~Company~~our ~~closed~~Consolidated aStatements ~~new~~of ~~loan~~Operations atand ~~the~~Comprehensive ~~Miami~~Loss ~~Design~~for ~~District joint venture in~~ the ~~amount~~three ofmonths ~~$500.0~~ended ~~million with an interest rate of 4.13%, which matures on~~ March 131, ~~2030. The loan replaced the previous debt of $480.0 million with an interest rate of LIBOR plus 2.50% that was scheduled to mature on May 14,~~ 2021. ~~As a result of the refinancing, the joint venture incurred $3.7 million of deferred financing costs that were capitalized.~~

AsOn February 5, 2021 the Company closed on a new loan at Kenwood Towne Centre in the amount of ~~September~~$210.0 30million. The new loan matures on February 9, ~~2020~~2024, weand ~~had~~bears $8the interest rate at LIBOR plus 3.240%. ~~billion~~The ofnew loan replaced the previous debt ~~pre-payable~~of at$194.0 million ~~our~~which ~~proportionate~~was ~~share~~scheduled ~~without~~to ~~penalty.~~mature Weon ~~may~~February ~~pursue~~9, ~~opportunities~~2021. toThe ~~refinance~~origination ~~this~~of ~~debt~~the atnew ~~lower~~loan ~~interest~~incurred ~~rates~~fees ~~and~~of ~~longer~~$5.0 ~~maturities~~million, which were capitalized.

As of September 30, 2020, our proportionate share of total debt aggregated $27.0 billion. Our total debt includes our consolidated debt of $16.5 billion and our share of unconsolidated real estate affiliates debt of $10.4 billion. Of our proportionate share of total debt, $6.8 billion is recourse to the Company or its subsidiaries (including the Facility) due to guarantees or other security provisions for the benefit of the note holder.46

~~The~~As ~~amount~~ of ~~debt~~March 31, ~~due~~2021, inwe ~~the~~had ~~next~~$9.1 ~~three~~billion ~~years~~of ~~represents~~debt ~~30.2%~~pre-payable ofat our ~~total~~proportionate ~~debt~~share atwithout ~~maturity~~penalty. ~~The~~We ~~maximum~~may ~~amount~~pursue ~~due~~opportunities into ~~any~~refinance ~~one~~this ofdebt ~~the next ten years is no more than $3.7 billion~~ at ~~our~~lower ~~proportionate~~interest ~~share~~rates orand ~~approximately~~longer ~~of 13~~maturities.~~7% our total debt at maturity.~~

~~The~~As ~~following~~of ~~table~~March 31, ~~illustrates~~2021, ~~the scheduled payments for~~ our proportionate share of total debt asaggregated of$23.2 ~~September 30, 2020~~billion. ~~The~~Our total debt includes our consolidated debt of $~~206~~16.23 ~~million~~billion ofand ~~junior~~our ~~subordinated~~share ~~notes~~of ~~are~~unconsolidated ~~due~~real inestate ~~2036,~~affiliates ~~but~~debt weof ~~may~~$6.9 ~~redeem~~billion. ~~them~~Of ~~any~~our ~~time~~proportionate ~~after~~share ~~April 30,~~of ~~2011~~total ~~(Note~~debt, $6).9 billion Asis werecourse doto ~~not~~the ~~expect~~Company toor ~~redeem~~its subsidiaries (including the ~~notes~~Facility) ~~prior~~due to ~~maturity,~~guarantees ~~they~~or ~~are~~other ~~included~~security inprovisions for the ~~consolidated~~benefit ~~debt~~of ~~maturing~~the ~~subsequent~~note ~~to 2025~~holder.

	Consolidated		Unconsolidated
	(Dollars in thousands)
Remainder of 2020	$	532,539	$	278,541
2021(1)	2,926,152		1,103,845
2022	2,039,508		1,266,138
2023(2)	2,826,245		918,490
2024	2,203,411		1,580,310
2025(3)	3,200,001		500,927
Subsequent	2,808,473		4,777,473
Total	$	16,536,329	$	10,425,724

The amount of debt due in the next three years represents 49.7% of our total debt at maturity. The maximum amount due in any one of the next ten years is no more than $4.1 billion at our proportionate share or approximately 17.8% of our total debt at maturity.

The following table illustrates the scheduled payments for our proportionate share of total debt as of March 31, 2021. The $206.2 million of junior subordinated notes are due in 2036, but we may redeem them any time after April 30, 2011 (Note 6). As we do not expect to redeem the notes prior to maturity, they are included in the consolidated debt maturing subsequent to 2026.


	Consolidated		Unconsolidated
	(Dollars in thousands)
Remainder of 2021 (1)	$	2,836,601	$	849,164
2022	2,498,212		1,259,286
2023(2)	2,819,689		1,216,775
2024	2,383,165		1,724,617
2025(3)	3,154,745		497,516
2026	1,208,232		212,919
Subsequent	1,355,243		1,103,076
Total	$	16,255,887	$	6,863,353

(1) Includes the Term A-1 Loan (Note 6).

(2) Includes the Term A-2 Loan (Note 6).

(3) Includes the Term B Loan (Note 6).

We believe we will be able to extend the maturity date, repay under our available line of credit or refinance the consolidated debt that is scheduled to mature in ~~2020~~2021. We also believe that the joint ventures will be able to refinance the debt of our unconsolidated real estate affiliates upon maturity; however, there can be no assurance that we 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.

Reserves

With respect to our consolidated properties, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021, weour ~~have~~balance ~~recorded $36.9 million and $59.8 million, respectively,~~ associated with potentially uncollectible revenues, ~~which~~decreased ~~includes~~by $23.~~4 million and $~~7.4 million~~, respectively, for straight-line rent receivables~~. With respect to our Unconsolidated Real Estate Affiliates, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021, our balance associated with potentially uncollectible revenues for our Unconsolidated Real Estate Affiliates ~~have~~decreased ~~recorded~~by $471.46 million ~~and $81.0 million~~, ~~respectively, associated with potentially uncollectible revenues,~~ which includes $3.0 ~~million and $10~~.17 million, ~~respectively,~~ for straight-line rent receivables. Of these amounts for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021, our share totaled $240.96 million ~~and $40.1 million, respectively,~~ which includes $10.53 million ~~and $4.8 million, respectively,~~ for straight-line rent receivables.

AsWith ofrespect ~~September 30,~~to ~~2020,~~our ~~the~~consolidated ~~Company~~properties, ~~including~~for ~~consideration~~the ofyear ~~our~~ended ~~share~~December of31, ~~Unconsolidated~~2020, ~~Real~~we ~~Estate~~recorded ~~Affiliates~~$42.3 million, ~~has~~associated ~~collected~~with ~~approximately~~potentially ~~65%~~uncollectible ofrevenues, ~~third~~which ~~quarter~~includes ~~rents~~$5.3 million, ~~and~~for ~~collections~~straight-line ~~continue~~rent ~~to increase subsequent to quarter end~~receivables. ~~While~~With ~~working~~respect to ~~preserve~~ our ~~profitability~~Unconsolidated ~~and~~Real ~~cash~~Estate ~~flow~~Affiliates, ~~we are also working with our tenants regarding requests~~ for ~~lease~~the ~~concessions~~year ~~and~~ended ~~other~~December ~~forms~~31, ~~of assistance~~2020, ~~although~~our weUnconsolidated ~~have~~Real ~~not~~Estate ~~executed~~Affiliates arecorded ~~significant number of agreements~~$68.7 million, ~~While~~associated wewith ~~anticipate~~potentially ~~that~~uncollectible ~~we may grant further rent concessions~~revenues, ~~such~~which asincludes ~~the deferral or abatement of lease payments~~$8.6 million, ~~such~~for ~~rent concession requests are evaluated on a case~~straight-~~by-case~~line ~~basis~~rent receivables. ~~Not~~Of ~~all~~these ~~requests~~amounts for ~~rent relief will be granted as~~ the ~~Company~~year ~~does~~ended ~~not~~December ~~intend~~31, to2020, ~~forgo~~our ~~its~~share ~~legally~~totaled ~~enforceable~~$33.8 million, ~~contractual~~which ~~rights~~includes ~~that~~$4.2 million, ~~exist~~for ~~under~~straight-line ~~its~~rent ~~lease agreements~~receivables.

As of March 31, 2021, the Company, including consideration of our share of Unconsolidated Real Estate Affiliates, had collected approximately 86% of first quarter rents. While working to preserve our profitability and cash flow, we are also working with our tenants regarding requests for lease concessions and other forms of assistance. The Company continues to make meaningful progress in its negotiations with national and local tenants to secure rental payments, despite a significant

portion of the Company's tenants requesting rental assistance, whether in the form of deferral or rent reduction. As of March 31, 2021, in response to the COVID-19 pandemic, the Company granted rent deferrals and rent abatements of 1% and 3% of 2021 rents, respectively. The rent abatements granted were considered lease modifications and will be recognized prospectively over the remaining lease terms from the period of the rent that was abated. While we anticipate that we may grant further rent concessions, such as the deferral or abatement of lease payments, such rent concession requests are evaluated on a case-by-case basis. Not all requests for rent relief will be granted as the Company does not intend to forgo its legally enforceable contractual rights that exist under its lease agreements.

Acquisitions and Joint Venture Activity

From time-to-time we may acquire whole or partial interests in high-quality retail properties or make strategic dispositions. Refer to Note 3 for more information.

Developments and Redevelopments

We are currently redeveloping several consolidated and unconsolidated properties primarily to improve the productivity and value of the property, convert large-scale anchor boxes into smaller leasable areas and to create new in-line retail space and new restaurant venues. The execution of these redevelopment projects within our portfolio was identified as providing compelling risk-adjusted returns on investment.

We have development and redevelopment activities totaling approximately $~~445~~462.0 million under construction and $~~365~~311.0 million in the pipeline. We continue to evaluate a number of other redevelopment projects to further enhance the quality of our assets. Expected returns are based on the completion of current and future redevelopment projects, and the success of the leasing and asset management plans in place for each project. Expected returns are subject to a number of variables, risks, and uncertainties including those disclosed within Part II, Item 1A of this Quarterly Report and those previously disclosed in our Annual Report. We also refer the reader to our disclosure related to forward-looking statements, below. The following table illustrates our planned redevelopments:

StabilizedYear

Proportionate Cost (1)

Property

Location

Description

Total

To-Date

Major Development Summary (in millions, at share unless otherwise noted)

Active redevelopments

Tysons Galleria

McLean, VA

Macy's Redevelopment for theater and multi level small shop expansion

2023

~~111~~108

2846

Alderwood

Lynnwood, WA

Sears Redevelopment - Residential

~~2022~~2023

Stonestown Galleria

San Francisco, CA

Anchor Redevelopment for Retail and Entertainment

~~2022~~2023

~~149~~151

99115

Other Projects

Various

~~2020~~2021-~~2023~~2024

~~172~~190

61114

Active developments/redevelopments

~~445~~462

~~191~~282

In planning

Oxmoor Center

Louisville, KY

Sears Redevelopment for Entertainment and Restaurants

2024

3015

Cumberland

Atlanta, GA

Residential

~~2024~~2025

1973

—

Northridge

Northridge, CA

Residential

2025

—

Ala Moana

Honolulu, HI

Residential Tower

~~2025~~2026

~~157~~166

Other Projects

Various

2021-2025

~~109~~7

165

In planning

~~365~~311

188

Total retail developments

~~810~~773

~~209~~290

(1) Costs are at BPYU's ownership share post August 28, 2018, with closing of new joint venture partnerships.

Our investment in these projects for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021 increased from December 31, ~~2019~~2020 in conjunction with the applicable development plan and as projects near completion. The continued progression of redevelopment projects resulted in increases to our investment to date. Prior to the COVID-19 pandemic, our current projects were generally progressing in accordance with their timeline and budget. The impact of the pandemic and associated restrictions that have been put in place by local governments may cause delays in construction and may impact our ability to progress pre-leasing efforts.

5748

Capital Expenditures, Capitalized Interest and Overhead (at share)

The following table illustrates our capital expenditures, capitalized interest, and ~~initial~~internal ~~direct~~ costs associated with leasing and development overhead, which primarily relate to ordinary capital projects at our operating properties. In addition, we incurred tenant allowances and capitalized leasing costs for our operating properties as outlined below. Capitalized interest is based upon qualified expenditures and interest rates; capitalized leasing and development costs are ~~initial~~based ~~direct~~upon ~~costs~~time asexpended ~~incremental~~on ~~costs~~these ~~of a lease that would not have been incurred if the lease had not been obtained~~activities. These costs are amortized over lives which are consistent with the related asset.

Nine Months Ended September 30,

Three Months Ended March 31,

2020

2019

2021

2020

(Dollars in thousands)

Operating capital expenditures (1)

9311,~~606~~903

~~122~~36,~~537~~259

Tenant allowances and capitalized leasing costs (2)

5921,~~598~~447

~~149~~28,~~234~~916

Capitalized interest and capitalized overhead

166,~~149~~012

175,~~848~~272

Total

~~169~~39,~~353~~362

~~289~~70,~~619~~447

(1)Reflects only non-tenant operating capital expenditures.

(2)Tenant allowances paid on 31.51 million square feet for the quarter ended March 31, 2021 and 1.9 million square feet for the quarter ended March 31, 2020.

Class A Stock Dividend

Our Board of Directors declared Class A Stock dividends during ~~2020~~2021 and ~~2019~~2020 as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

2021

February 1

February 26, 2021

March 31, 2021

0.3325

2020

November 5

November 30, 2020

December 31, 2020

0.3325

August 5

August 31, 2020

September 30, 2020

~~0.3325~~$

0.3325

May 7

May 29, 2020

June 30, 2020

~~0.3325~~$

0.3325

February 5

February 28, 2020

March 31, 2020

~~0.3325~~$

0.3325

2019

November 4

November 29

December 31

0.3300

August 1

August 30

September 30

0.3300

May 6

May 31

June 28

0.3300

February 6

February 28

March 29

0.3300

Class B Stock Dividend

Our Board of Directors did not declare dividends on Class B-1 Stock, Class B-2 Stock, or Series B Preferred Stock during the ~~nine~~three months ended ~~September~~March 3031, ~~2020.~~2021 ~~Our~~or ~~Board~~during ofthe ~~Directors~~three ~~declared~~months ~~dividends~~ended onMarch ~~these~~31, ~~classes~~2020. ~~of stock during 2019 as follows:~~

Class B-1 Stock Dividends

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

November 4

December 25

0.110

On November 4, 2019, a partial dividend was declared in the amount of $0.11 per share of the Class B-1 Stock.

Class B-2 Stock Dividends

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

November 4

December 25

0.110

On November 4, 2019, a partial dividend was declared in the amount of $0.11 per share of the Class B-2 Stock.

Combined Class B Stock and Series B Preferred Stock

Declaration Date

Record Date

Payment Date

Average Dividend Per Share

2019

May 25

June 25

0.397

March 25

March 27

1.015

In the quarter ended June 30, 2019, a dividend was declared on the Class B-1 Stock and the Series B Preferred Stock of the Company in the amount equal to all unpaid dividends on such shares from March 31, 2019 to June 25, 2019 at the rate of 7.5% per annum payable on June 25, 2019 to the holders of record of Class B-1 Stock and the Series B Preferred Stock on June 25, 2019 for a combined distribution total of approximately $183.8 million.

Preferred Stock Dividends

On February 13, 2013, GGP issued, under a public offering, 10,000,000 shares of 6.375% Series A Cumulative Stock at a price of $25.00 per share. In connection with the BPY Transaction of 2018, each share was converted into one share of 6.375% Series A Preferred Stock. Our Board of Directors declared preferred stock dividends during ~~2020~~2021 and ~~2019~~2020 as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

2021

May 6

June 15, 2021

July 1, 2021

0.3984

February 1

March 15, 2021

April 1, 2021

0.3984

2020

November 5

December 15, 2020

January 1, 2021

0.3984

August 5

September 15, 2020

October 1, 2020

~~0.3984~~$

0.3984

May 7

June 15, 2020

July 1, 2020

~~0.3984~~$

0.3984

February 5

March 15, 2020

April 1, 2020

~~0.3984~~$

0.3984

2019

November 4

December 13, 2019

January 1, 2020

0.3984

August 1

September 13, 2019

October 1, 2019

0.3984

May 6

June 14, 2019

July 1, 2019

0.3984

February 6

March 15, 2019

April 1, 2019

0.3984

Summary of Cash Flows

Cash Flows from Operating Activities

Net cash (used in) provided by operating activities was $~~(93~~155.7)6 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021 and $~~252~~11.20 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2019~~2020. Significant components of net cash (used in) provided by operating activities include:

•in ~~2020~~2021, ~~equity~~Net in (loss) ofincome ~~Unconsolidated Real Estate Affiliates~~ of $~~105~~(255.46) million;

•in ~~2020~~2021, ~~depreciation~~equity ~~and~~in ~~amortization~~loss of Unconsolidated Real Estate Affiliates of $~~485~~34.45 million;

•in ~~2020~~2021, ~~unconsolidated~~depreciation ~~real~~and ~~estate~~amortization ~~affiliates - loss on investment, net~~ of $~~(10~~151.9)5 million;

•in ~~2020~~2021, ~~loss~~unconsolidated ~~from~~real ~~changes~~estate inaffiliates ~~control~~- ofloss ~~investment~~on ~~properties and other~~investment, net of $152.41 million;

•in ~~2020~~2021, ~~provision~~gain ~~for~~from ~~impairment~~changes in control of investment properties and other, net of $71(1.58) million;

•in ~~2020~~2021, ~~gain~~provision onfor ~~extinguishment~~impairment of ~~debt of~~ $~~(14~~107.3)0 million;

•in ~~2020~~2021, ~~accounts~~gain ~~and~~on ~~notes~~extinguishment ~~receivable,~~of ~~net~~debt of $(~~364~~13.61) million;

•in ~~2020~~2021, ~~prepaid~~accounts ~~expenses~~ and ~~other~~notes ~~assets~~receivable, net of $~~(27~~132.6)2 million;

•in ~~2020~~2021, ~~account~~prepaid ~~payable~~expenses and ~~accrued~~other ~~expenses~~assets of $5322.73 million;

•in ~~2019~~2021, ~~depreciation~~account payable and ~~amortization~~accrued expenses of $~~357~~(30.45) million;

59•in 2020, Net (loss) income of $(100.4) million;

•in ~~2019~~2020, ~~unconsolidated~~depreciation ~~real~~and ~~estate~~amortization ~~affiliates - loss on investment, net~~ of $~~(138~~157.0)3 million; and

•in ~~2019~~2020, ~~provision~~unconsolidated ~~for~~real ~~impairment~~estate affiliates - gain on investment, net of $~~223~~(12.16) million~~; and~~.

•in 2019, account payable and accrued expenses of $(39.9) million.

Cash Flows from Investing Activities

Net cash (used in) investing activities was $(~~182~~23.94) million for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021 and $~~(396~~11.0)3 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2019~~2020. Significant components of net cash (used in) investing activities include:

•in ~~2020~~2021, development of real estate and property improvements of $(~~219~~67.73) million;

•in ~~2020~~2021, proceeds from sales of investment properties and unconsolidated real estate affiliates of $84(1.59) million;

•in ~~2020~~2021, contributions to unconsolidated real estate affiliates of $(7522.28) million;

•in ~~2020~~2021, distributions received from unconsolidated real estate affiliates in excess of income of $2968.76 million;

•in ~~2019~~2020, development of real estate and property improvements of $(~~381~~83.86) million;

•in ~~2019~~2020, proceeds from ~~repayment~~sales of ~~loans~~investment toproperties ~~joint~~and ~~venture~~unconsolidated ~~partners~~real estate affiliates of $1881.0 million; and

•in ~~2019~~2020, ~~contributions~~distributions toreceived from unconsolidated real estate affiliates in excess of income of $~~(208~~34.3)7 million;.

•in 2019, distributions received from unconsolidated real estate affiliates in excess of income of $269.5 million;

•in 2019, loans to affiliates of $(330.0) million;

•in 2019, proceeds from loan to affiliates of $330.0 million; and

•in 2019, loans to joint venture and joint venture partners of $(97.5) million.

Cash Flows from Financing Activities

Net cash provided by financing activities was $~~267~~(79.98) million for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021 and $82(10.29) million for the ~~nine~~three months ended ~~September~~March 3031, ~~2019~~2020. Significant components of net cash provided by financing activities include:

•in ~~2020~~2021, proceeds from the refinancing or issuance of mortgages, notes and loans payable of $~~811~~40.12 million;

•in ~~2020~~2021, principal payments on mortgages, notes, and loans payable of $(~~751~~113.28) million;

•in ~~2020~~2021, buyback of Class A Stock of $(~~133~~15.6) million;

•in ~~2020~~2021, issuance of Class B Stock of $~~414~~29.35 million;

•in ~~2020~~2021, ~~series~~cash Kdistributions ~~preferred~~paid ~~units~~to ~~redemptions~~stockholders of $(2813.35) million;

•in 2020, proceeds from the refinancing or issuance of mortgages, notes and loans payable of $246.0 million;

•in 2020, principal payments on mortgages, notes, and loans payable of $(222.7) million;

•in 2020, payment received on note receivable of $31.7 million;

•in 2020, ~~cash~~buyback ~~distributions~~of ~~paid~~Class toA ~~stockholders~~Stock of $(5415.9) million;

•in ~~2019~~2020, ~~proceeds~~series ~~from~~K ~~the~~preferred ~~refinancing~~units orredemption ~~issuance~~ of ~~mortgages, notes and loans payable of~~ $4(28.74) ~~billion, which includes a $1 billion bonds issuance~~million; and

•in ~~2019~~2020, ~~principal~~cash ~~payments~~distributions onpaid ~~mortgages,~~to ~~notes,~~stockholders ~~and loans payable~~ of $(320.45) ~~billion;~~million.

~~•in 2019, buyback of Class A Stock of $(114.9) million;~~50

•in 2019, buyback of Class B-1 Stock of $(224.5) million;

•in 2019, cash distributions to noncontrolling interests in consolidated real estate affiliates of $(67.0) million; and

•in 2019, cash distributions paid to stockholders of $(738.0) million.

Seasonality

Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the fourth quarter of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based on our consolidated interim financial statements, which have been prepared in accordance with GAAP. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the preparation of the consolidated financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A disclosure of our critical accounting policies which affect our more significant judgments and estimates used in the preparation of our consolidated financial statements is included in our Annual Report in Management's Discussion and Analysis of Financial Condition and Results of Operations.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, there were no significant changes to these policies, except for the policies related to the application of lease modification guidance in Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842", "Topic 842", or "the new leasing standard") as a result of the COVID-19 pandemic as described in Note 2 and below.

Topic 842 - Lease Modification Q&A

Due to the business disruptions and challenges severely affecting the global economy caused by the global economic shutdown, lessors may provide rent deferrals and other lease concessions to lessees. In April 2020, the Financial Accounting Standards Board staff issued a question and answer document (the "Lease Modification Q&A") focused on the application of lease accounting guidance to lease concessions provided as a result of the shutdown. Under existing lease guidance, economic relief that is agreed to or negotiated outside of the original lease agreement is typically considered a lease modification, in which case both the lessee and lessor would be required to apply the respective modification frameworks. However, if the lessee was entitled to the economic relief because of either contractual or legal rights, the relief would be accounted for outside of the modification framework. Although the original lease modification guidance in Accounting Standards Codification (“ASC”) 842, Leases remain appropriate to address routine lease modifications, the Lease Modification Q&A established a different framework to account for certain lease concessions granted in response to the shutdown. The Lease Modification Q&A allows the Company, if certain criteria have been met, to make an accounting policy election to account for COVID-19 related lease concessions as either a lease modification or a negative variable adjustment to rental revenue. Such election is required to be applied consistently to leases with similar characteristics and similar circumstances.

Refer also to the accounting policies discussed in Note 2 of the Consolidated Financial Statements.

REIT Requirements

In order to remain qualified as a REIT for Federal income tax purposes, we must distribute at least 90% of our taxable ordinary income to stockholders. We are also subject to federal income tax to the extent we distribute less than 100% of our REIT taxable income, including capital gains. See Note 8 to the Consolidated Financial Statements for more detail on our ability to remain qualified as a REIT.

Recently Issued Accounting Pronouncements

Refer to Note 2 of the Consolidated Financial Statements for recently issued accounting pronouncements.

Non-GAAP Supplemental Financial Measures and Definitions

Funds From Operations ("FFO")

The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts ("Nareit"). The Company determines FFO to be its share of consolidated net income (loss) attributable to ~~BPYU~~common stockholders and redeemable non-controlling common unit holders computed in accordance with GAAP, adjusted for real estate related depreciation and amortization, ~~amortization of above and below market rent on ground leases,~~ excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon the Company's economic ownership interest, and all determined on a consistent basis in accordance with GAAP.

The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company's properties between periods because it does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.

estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.

We calculate FFO in accordance with standards established by Nareit, which may not be comparable to measures calculated by other companies who do not use the Nareit definition of FFO or do not calculate FFO in accordance with Nareit guidance. In addition, although FFO is a useful measure when comparing our results to other REITs, it may not be helpful to investors when comparing us to non-REITs.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

In order to provide a better understanding of the relationship between the Company's non-GAAP financial measures of FFO, a reconciliation of GAAP net income attributable to BPYU to FFO has been provided. The Company’s non-GAAP financial measure does not represent cash flow from operating activities in accordance with GAAP and should not be considered as an alternative to GAAP net income (loss) attributable to BPYU and is not necessarily indicative of cash flow. In addition, the Company has presented such financial measures on a consolidated and unconsolidated basis (at the Company's proportionate share) as the Company believes that given the significance of the Company's operations that are owned through investments accounted for by the equity method of accounting, the detail of the operations of the Company's unconsolidated properties provides important insights into the income and FFO produced by such investments.

The following table reconciles GAAP net income attributable to BPYU to FFO for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2020~~2021 and ~~2019~~2020:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2020

2019

2020

2019

2021

2020

Net loss Attributable to BPYU

(~~170~~229,~~620~~121)

(3381,~~423~~827)

~~(461,497)~~

~~(228,988)~~

Provision for impairment excluded from FFO - Consolidated Properties

—106,991

~~38,941~~—

~~71,455~~

~~223,287~~

Provision for impairment excluded from FFO - Unconsolidated Properties

23,~~470~~405

—

~~45,145~~

—

Unconsolidated Real Estate Affiliates - gain on investment

—4,211

—

~~(104,354)~~

Gain on sales of investment properties

(1,~~824~~024)

(56,~~093~~759)

~~(8,474)~~

~~(10,640)~~

Above and below market ground rent

939

—1,566

~~3,444~~

—

Preferred stock dividends

(3,984)

~~(11,952)~~

Loss (gain) from changes in control of investment properties and other

—(1,824)

~~(39,712)~~—

~~15,433~~

~~(39,712)~~

Depreciation and amortization of capitalized real estate costs - Consolidated Properties

~~160~~147,~~379~~151

~~115~~152,~~490~~588

~~471,106~~

~~343,054~~

Depreciation and amortization of capitalized real estate costs - Unconsolidated Properties

~~114~~104,~~527~~524

~~131~~117,~~987~~659

~~344,720~~

~~406,818~~

Allocation of noncontrolling interests (1)

(2736,~~671~~800)

(2426,~~177~~269)

~~(93,019)~~

~~(98,425)~~

FFO

7494,~~216~~468

~~180~~152,~~029~~974

~~376,361~~

~~479,088~~

(1) Noncontrolling interest holders' share of adjustments including depreciation, impairment, gain (loss) from changes in control of investment properties and other, Unconsolidated Real Estate Affiliates - gain on investment and gain on sales of investment properties.

Forward-Looking Statements

Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended ~~(the "Exchange Act")~~. Statements that do not relate to historical or current facts or matters are forward-looking statements. When used, the words "may," "will," "seek," "expects," "anticipates," "believes," "targets," "intends," "should," "estimates," "could," "continue," "assume," "projects," "plans," or similar expressions, are intended to identify forward-looking statements. Although we believe the expectations reflected in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Accordingly, investors should use caution in relying on forward-looking statements.

are intended to identify forward-looking statements. Although we believe the expectations reflected in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors, including the recent novel coronavirus outbreak. Our future results may be impacted by risks associated with the global economic shutdown and the related global reduction in commerce and travel and substantial volatility in stock markets worldwide, which may result in a decrease of cash flows and impairment losses on our investments and real estate properties, and we may be unable to achieve our expected returns. Accordingly, investors should use caution in relying on forward-looking statements.

Some of the other risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to:

•the market price of BPY units and the combined business performance of BPY as a whole;

•general volatility of conditions affecting the retail sector;

•the effects of the COVID-19 pandemic and the possibility of future outbreaks of highly infectious or contagious diseases;

•our inability to acquire and maintain tenants or to lease space on terms favorable to us;

•risks related to the bankruptcy or store closures of national tenants with chains of stores in many of our properties;

•our inability to sell real estate quickly;

•risks related to perceptions by retailers and shoppers of the convenience and attractiveness of our retail properties;

•risks related to the development, expansion and acquisitions of properties;

•risks related to competition in our business;

•risks related to natural disasters, pandemics/epidemics or terrorist attacks;

•risks related to cyber and data security breaches or information technology failures;

•environmental uncertainties and related costs, including costs resulting from uninsured potential losses;

•general risks related to inflation or deflation;

•discontinuation of LIBOR;

•risks relating to impairment charges for our real estate assets;

•risks related to conflicts of interest with BPY and our status as a "controlled company" within the meaning of the rules of Nasdaq;

•our dependence on our subsidiaries for cash;

•risks related to our joint venture partners, including risks related to conflicts of interests, potential bankruptcies, tax-related obligations and financial support relating to such joint venture partners;

•our inability to maintain status as a REIT, and possible adverse changes to tax laws;

•risks related to our indebtedness and debt restrictions and covenants;

•our inability to refinance, extend, restructure or repay near and indeterminate debt;

•our inability to raise capital through financing activities or asset sales; and

•risks related to the structure and trading of Class A Shares.

We discuss these and other risks and uncertainties in our Annual Report and our quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In July 2017, the Financial Conduct Authority ("FCA") announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR. ~~The~~On ~~Company~~March is5, ~~not~~2021 ~~able~~the toFCA ~~predict~~announced ~~when~~that USD-LIBOR will ~~cease~~no tolonger be published orafter ~~precisely~~June ~~how~~30, ~~SOFR will be calculated and published~~2023. ~~Any~~The ~~changes~~Company ~~adopted~~anticipates bythat ~~FCA or other governing bodies in the method used for determining~~ LIBOR ~~may~~will ~~result~~continue into abe ~~sudden~~available orsubstantially ~~prolonged increase or decrease~~ in ~~reported~~its ~~LIBOR.~~current Ifform ~~that~~at ~~were~~least tountil ~~occur,~~June ~~our interest payments could change. In addition~~30, ~~uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.~~

2023. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

The Company has contracts that are indexed to LIBOR and is monitoring and evaluating the related risks, which include interest amounts on our variable rate debt and the swap rate for our interest rate swaps as discussed in Note 6 - Mortgages, Notes and Loans Payable. In the event that LIBOR is discontinued, the interest rates will be based on a fallback reference rate specified in the applicable documentation governing such debt or swaps or as otherwise agreed upon. Such an event would not affect the Company’s ability to borrow or maintain already outstanding borrowings or swaps, but the alternative reference rate could be higher and more volatile than LIBOR.

Certain risks arise in connection with transitioning contracts to an alternative reference rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require substantial negotiation with each respective counterparty.

If a contract is not transitioned to an alternative reference rate and LIBOR is discontinued, the impact is likely to vary by contract. If LIBOR is discontinued or if the method of calculating LIBOR changes from its current form, interest rates on our current or future indebtedness may be adversely affected.

While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

ITEM 4 CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the persons performing the functions of principal executive and principal financial officers for us pursuant to the Master Services Agreement, dated August 27, 2018, among us, BAM and other parties thereto (the "Master Services Agreement"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act). Based on that evaluation, the persons performing the functions of principal executive and principal financial officers for us pursuant to the Master Services Agreement have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.

6454

PART II OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

ITEM 1A RISK FACTORS

~~The~~For ~~following~~a ~~risk~~discussion ~~factors~~of ~~supplement~~our ~~the~~potential ~~risk~~risks ~~factors~~and ~~described~~uncertainties, ~~under~~please ~~Part~~refer I,to ~~Item~~the ~~1A. "~~“Risk Factors"” section in our Annual Report on Form 10-K for the year ended December 31, ~~and~~2020, ~~should~~as befiled ~~read~~on inFebruary ~~conjunction~~26, ~~with~~2021. Other than the ~~other~~risks related to the BPY Transaction of 2021 set forth below, there have been no material changes to the risk factors ~~presented~~previously disclosed in ~~the~~our Annual Report on Form 10-K for the year ended December 31, 2020.

InRisks ~~the~~Related ~~near term, we expect~~ to ~~be impacted by~~ the ~~ongoing~~BPY ~~and~~Transaction ~~developing~~of COVID-19 pandemic, which has interrupted business activities and supply chains; disrupted travel; contributed to significant volatility in the financial markets, resulting in a general decline in equity prices and lower interest rates; impacted social conditions; and adversely impacted local, regional, national and international economic conditions, as well as the labor markets.2021

~~Public~~The ~~Health~~Default ~~Risk~~Consideration will not be adjusted in the event of any change in the unit or share prices of either BPY or BAM.

~~Our~~Upon ~~business~~the ~~could~~consummation beof ~~materially~~the ~~adversely~~BPY ~~affected~~Transaction, byeach ~~the~~outstanding ~~effects~~share of ~~the~~our ~~COVID-19~~Class ~~pandemic~~A ~~and~~Stock ~~the~~will ~~future~~receive ~~outbreak~~the ofsame ~~other~~per ~~highly~~share ~~infectious~~Default orConsideration ~~contagious~~(as ~~diseases.~~described Asin aManagement’s ~~result~~Discussion ofand ~~the~~Analysis ~~rapid spread~~ of ~~COVID-19,~~Financial ~~many~~Condition ~~companies~~ and ~~various~~Results ~~governments~~of ~~have~~Operations—Overview—BPY ~~imposed~~Transaction ~~restrictions~~in onPart ~~business~~I, ~~activity~~Item ~~and~~2 ~~travel~~of ~~which~~this ~~may~~Quarterly ~~continue~~Report ~~and~~on ~~could~~Form ~~expand.~~10-Q) ~~Business~~as ~~has~~will ~~slowed~~be ~~around~~received ~~the~~by ~~globe~~BPY ~~including~~unitholders inwho ~~our~~have ~~retail~~not ~~business,~~made ~~and~~an ~~there~~election. ~~can~~The beDefault noConsideration ~~assurance~~will ~~that~~not ~~strategies~~be toadjusted ~~address~~for ~~potential~~changes ~~disruptions~~ in ~~operations~~the ~~will~~market ~~mitigate~~prices ~~the~~of ~~adverse~~either ~~impacts~~BPY ~~related~~units toor the ~~outbreak~~Brookfield Shares. ~~Given~~Changes in the ~~ongoing~~market ~~and~~price ~~dynamic nature~~ of the ~~circumstances~~Brookfield ~~surrounding~~Shares ~~COVID-19,~~prior ~~it is difficult~~ to ~~predict how significant~~ the ~~impact~~closing of ~~this~~the ~~coronavirus~~BPY ~~outbreak,~~Transaction ~~including any responses to it,~~ will beaffect on the ~~global~~market ~~economy,~~value ~~our~~of ~~company~~the ~~and~~Default ~~our~~Consideration. ~~business~~Market orprice ~~for~~changes ~~how~~may ~~long~~result ~~disruptions~~from ~~are~~a ~~likely~~variety toof ~~continue.~~factors ~~The~~(many ~~extent~~ of ~~such impact will depend on future developments,~~ which are ~~highly~~beyond ~~uncertain,~~the ~~rapidly~~control ~~evolving~~of BPY and ~~cannot be predicted~~BAM), including ~~new~~market ~~information~~reaction ~~which~~to ~~may emerge concerning~~ the ~~severity~~announcement of ~~this~~the ~~coronavirus~~BPY ~~and~~Transaction, ~~actions~~changes ~~taken~~in ~~to contain~~ the ~~COVID-19~~respective orbusinesses, ~~its impact~~operations, ~~among others. Such developments~~assets, ~~depending~~financial onposition ~~their~~of ~~nature,~~BPY ~~duration,~~ and ~~intensity~~BAM, ~~could~~or ~~have~~changes ain ~~material~~market ~~adverse~~assessments ~~effect~~thereof, onand ~~our~~other ~~business,~~factors ~~financial~~described ~~position,~~or ~~results~~referred ofto ~~operations~~elsewhere orin ~~cash~~this ~~flows~~“Risk Factors” section.

WeCompletion ~~operate~~of inthe ~~industries~~BPY orTransaction ~~geographies~~of ~~impacted~~2021 byis ~~COVID-19.~~subject ~~Many~~to ofmany ~~these~~closing ~~are~~conditions ~~facing financial~~ and ~~operational~~if ~~hardships~~these ~~due~~conditions toare ~~COVID-19~~not ~~and~~satisfied ~~responses~~or towaived, ~~it.~~the ~~Adverse~~BPY ~~impacts~~Transaction onof ~~our~~2021 ~~business~~will ~~may~~not ~~include:~~be completed.

•The consummation of the BPY Transaction is subject to certain conditions, including (a) ~~complete~~the approval of the BPY Transaction by the holders of a majority of the outstanding BPY units (excluding the BPY units held directly or ~~partial~~indirectly ~~closure~~by BAM and its subsidiaries and certain other units required to be excluded), (b) the absence of any temporary restraining order, injunction or other ~~operational~~legal ~~issues~~order, atand no change in law being enacted, ~~one~~which would have the effect of making illegal or ~~more~~otherwise prohibiting preventing the consummation of ~~our~~the ~~properties~~BPY ~~resulting~~Transaction ~~from~~and ~~government~~(c) orother ~~tenant~~customary ~~action;~~conditions.

•aThere ~~slowdown~~can inbe ~~business~~no ~~activity~~assurance that the conditions to closing of the BPY Transaction will be satisfied or waived or that the BPY Transaction will be completed. Failure to consummate the BPY Transaction may ~~severely~~adversely ~~impact~~affect our ~~tenants'~~results ~~businesses~~of operations and business prospects for the following reasons, ~~financial~~among ~~condition~~others: ~~and~~(i) ~~liquidity~~we and ~~may~~BPY ~~cause~~will ~~one~~incur orcertain ~~more~~transaction costs, regardless of ~~our~~whether ~~tenants~~the toproposed beBPY ~~unable~~Transaction tocloses, ~~fund~~which ~~their~~could ~~business~~adversely ~~operations~~affect our financial condition, ~~meet~~results ~~their~~of ~~obligations~~operations and ability to usmake indistributions ~~full~~to our unitholder and stockholders; and (ii) the proposed BPY Transaction, whether or atnot ~~all~~it closes, orwill todivert ~~otherwise~~the ~~seek~~attention ~~modifications~~of management and other key employees from ongoing business activities, including the pursuit of ~~such~~other ~~obligations;~~opportunities that could be beneficial to the Company.

~~•an~~Failure ~~increase~~to incomplete ~~re-leasing~~the ~~timelines,~~BPY ~~potential~~Transaction ~~delays in lease-up~~ of ~~vacant~~2021 ~~space~~could ~~and~~negatively ~~the~~impact ~~market~~our ~~rates~~stock atprice, ~~which~~future ~~such~~business ~~lease~~and ~~will~~financial ~~be executed;~~results.

~~•reduced~~If ~~economic~~the ~~activity~~BPY Transaction is not completed, our ongoing business could ~~result~~be inadversely affected and we will be subject to a ~~prolonged~~variety ~~recession~~of risks associated with the failure to complete the BPY Transaction, ~~which~~including (i) having to pay certain costs relating to the proposed BPY Transaction, such as legal, accounting, financial advisor, filing, printing and mailing fees and (ii) diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the BPY Transaction. If the BPY Transaction is not completed, these risks could ~~negatively~~materially ~~impact~~affect ~~consumer~~our ~~discretionary~~business, ~~spending;~~financial results and stock price.

•expected completion dates for our development and redevelopment projects may be subject to delay as a result of local economic conditions that may continue to be disrupted as a result of the COVID-19 pandemic.55

IfThe ~~these~~pendency ~~and~~of ~~potential~~the ~~other~~BPY ~~disruptions~~Transaction ~~caused~~of by2021 ~~COVID-19~~could ~~continue,~~adversely affect our business ~~could~~and ~~be materially adversely affected~~operations.

~~Credit~~Prior ~~Risk~~to the effective time of the BPY Transaction, some of our customers, prospective customers or vendors may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of us, regardless of whether the BPY Transaction is completed.

The recent global economic shutdown has increased the risk in the near-term of our tenants’ ability to fulfill lease commitments, which has been materially impacted by retail store closures, quarantines and stay-at-home orders. Many of our tenants could declare bankruptcy or become insolvent and cease business operations as a result of prolonged mitigation efforts.

Lease Roll-over Risk

Lease roll-over risk arises from the possibility that we may experience difficulty renewing leases as they expire or in re-leasing space vacated by tenants upon early lease expiry. Due to the shutdown, we may experience an increase in re-leasing timelines, potential delays in lease-up of vacant space and the market rates at which such leases will be executed could be impacted.

Economic Risk

Real estate is relatively illiquid and may be even more illiquid in the context of an economic downturn that may result from the global economic shutdown. Such illiquidity may limit our ability to vary our portfolio promptly in response to changing economic or investment conditions. Also, financial difficulties of other property owners resulting in distressed sales could depress real estate values in the markets in which we operate.

Interest Rate and Financing Risk

We have an on-going need to access debt markets to refinance maturing debt as it comes due. There is a risk that lenders will not refinance such maturing debt on terms and conditions acceptable to us or on any terms at all. This risk may be increased as a result of disrupted market conditions resulting from the shutdown. Our strategy to stagger the maturities of our mortgage portfolio attempts to mitigate our exposure to excessive amounts of debt maturing in any one year and to maintain relationships with a large number of lenders to limit exposure to any one counterparty.

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Period	(a) Total number of shares (or units) purchased			(b) Average price paid per share (or unit)		(c) Total number of shares (or units) purchased as part of publicly announced plans or programs		(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
July 1 - July 31, 2020	$	—		$	—	$	—	(1)
January 1 - January 31, 2021	$	—		$	—	$	—	(1)
August 1 - August 31, 2020	—			—		—		(2)
February 1 - February 28, 2021	841,950		(3)	18.56		—		(1)
September 1 - September 30, 2020	2,606,289			11.4600		2,606,289		(2)
March 1 - March 31, 2021	—			—		—		(1)
Total	$	2841,~~606,289~~950		$	—18.56	$	~~2,606,289~~—	(32)

(1)On August 15, ~~2019~~2020, the Company’s Board of Directors authorized the repurchase of the greater of (i) 5% of the Company’s Class A Stock that are issued or outstanding or (ii) 10% of its public float of Class A Stock over the next 12 months from time to time as market conditions warrant.

(2)OnAs of August 5, 2020, the ~~Company’s~~number ~~Board~~of shares of ~~Directors~~Class ~~authorized~~A ~~the~~Stock ~~repurchase~~comprising 10% of the ~~greater~~Company's ofpublic ~~(i)~~float was greater than 5% of the Company’'s issued and outstanding Class A Stock, ~~that~~and ~~are~~was ~~issued~~equal orto ~~outstanding~~5,219,854 orshares ~~(ii)~~of ~~10%~~Class A Stock. As of ~~its~~March ~~public~~31, ~~float~~2021, zero shares of Class A Stock ~~over~~were ~~the~~available ~~next~~for 12repurchase ~~months~~under ~~from~~the ~~time~~Company's tostock ~~time~~repurchase ~~as market conditions warrant~~plan.

(3)AsThe ~~of August 5~~841,950 ~~2020, the number of~~ shares of Class A ~~Stock~~stock ~~comprising~~were ~~10%~~repurchased ofby the ~~Company's~~company ~~public~~and ~~float~~deposited ~~was~~in ~~greater~~a ~~than~~trust 5%maintained ofby the Company's ~~issued~~transfer ~~and~~agent ~~outstanding~~for ~~Class~~the Abenefit ~~Stock,~~of ~~and~~individuals ~~was~~who ~~equal~~have toreceived ~~5,219,854~~grants of restricted shares of Class A ~~Stock~~stock. AsShares ofwill ~~September~~be ~~30,~~released ~~2020,~~to ~~2,613,565~~such ~~shares~~individuals upon vesting in accordance with the terms of the Brookfield Property Group Restricted BPR Class A Stock plan and the applicable agreements. These shares were ~~available~~repurchased ~~for~~at ~~repurchase~~an ~~under~~average ~~the~~price ~~Company's~~of ~~stock~~$18.56, ~~repurchase~~for ~~plan~~an aggregate purchase price of $15. 63 million

In the first quarter 2021, BPYU issued 1,379,150 shares of Class B-1 Stock ~~Issuances~~to BPR FIN I Subco LLC, a related party, due to total contributions of $29.5 million, equal to $21.39 per share. These Shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

In the third quarter 2020, BPYU issued 19,367,288 shares of Class B-1 Stock to BPR FIN I Subco LLC, a related party, due to total contributions of $414.3 million, equal to $21.39 per share. These Shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 OTHER INFORMATION

None.

6756

ITEM 6 EXHIBITS

Incorporated by Reference Herein

Exhibit Number

Description

Form

Exhibit

Filing Date

File No.

10.1

First Amendment to the Credit Agreement, dated as of July 29, 2020, by and among Brookfield Retail Holdings VII Sub 3 LLC, a Delaware limited liability company, Brookfield Property REIT Inc., a Delaware corporation (f/k/a GGP Inc.), BPR Nimbus LLC, a Delaware limited liability company (f/k/a GGP Nimbus, LLC), BPR Cumulus LLC, a Delaware limited liability company (f/k/a GGP Limited Partnership LLC), BPR OP, LP (f/k/a GGP Operating Partnership, LP), a Delaware limited partnership, GGSI Sellco, LLC, a Delaware limited liability company, GGPLP Real Estate 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company, GGPLPLLC 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company, GGPLP 2010 Loan Pledgor Holding, LLC, a Delaware limited liability company and GGPLP L.L.C., a Delaware limited liability company, the Lenders party hereto, and Wells Fargo Bank, National Association, in its capacities as administrative agent and collateral agent for the Lenders.

8-K

10.1

7/29/2020

001-34948

31.1*

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

31.2*

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

32.1**

Certification of Brian W. Kingston, Chief Executive Officer, Brookfield Property Group LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

Certification of Bryan K. Davis, Chief Financial Officer, Brookfield Property Group LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH*

Inline XBRL Taxonomy Extension Schema Document.

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document.

104*

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).

*Filed herewith.

** Furnished herewith.

6857

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Brookfield Property REIT Inc.
Date: November 9, 2020	By:	/s/ Michelle Campbell
Date: May 7, 2021	By:	/s/ Michelle Campbell
		Michelle Campbell
		Secretary
Date: November 9, 2020	By:	/s/ Bryan K. Davis
Date: May 7, 2021	By:	/s/ Bryan K. Davis
		Bryan K. Davis
		Chief Financial Officer*
		Brookfield Property Group LLC

* Mr. Davis performs the functions of chief financial officer for Brookfield Property REIT Inc. (the "Company") pursuant to a Master Services Agreement, dated August 27, 2018, among Brookfield Asset Management Inc., the Company and certain other parties thereto.

6958

Filing Compare · Brookfield Property REIT Inc.