Brookfield Property Partners: Dividend Safety In Question

Seeking AlphaREITsBrookfield Property Partners: Dividend Safety In QuestionNov. 9, 2020 3:49 AM ET|| About: Brookfield Property Partners L.P. (BPY), BPYPN, BPYPO, BPYPP, BPYU, BPYUP, Includes: BAMby: Trapping ValueTrapping Value Conservative Income PortfolioThe best way to provide income in today's markets while reducing risksSummaryWe had a bullish take on Brookfield Property Partners when we last wrote on it.
We examine the recent results in light of the stock price gaining 70% since then.
We also examine the dividend safety and tell you why we are increasing our risk rating.
We recommend going higher in the capital structure.
When we last covered Brookfield Property Partners (BPY), we made a compelling case to use the safer route to get a 10% yield.
If you do believe that malls will never be the same again and office properties will be rendered obsolete by working from home, then there are absolutely no investments you should own, as the economy has much further south to go. But if you do think that the pandemic will end at some point and we will reach even 95% of the pre-pandemic GDP, then BPY makes a lot of sense. BPY preferreds are an even more compelling option for those who want the yield with less risk.
Source: Brookfield Property Partners: A Bulletproof 10% Yield
BPY has reported three quarters' worth of financial information since then. The stock has had a strong move as well.
Data by YCharts
With the stock now near the top end of what we thought it could achieve, we look at the thesis to see if it is time to take profits.
The Assets
The case for BPY has always been underpinned by its premier office properties in key locations.

Source: Q3-2020 Supplemental
This has been supplemented by strong retail locations and opportunistic investments through which BPY has successfully recycled capital. Of course, the hit of COVID-19 called into question all three prongs of that approach.
Q3-2020
BPY's recent... Read more

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