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as Two Reston Crescent in suburban Virginia. To facilitate all of this, we added a number of key personnel to our team including new heads of development in the U.S. and Canada.
Additionally in 2006, we picked up an additional
9.1 million square feet of development density, bringing our total pipeline to 17.2 million square feet, by acquiring a site on West 33rd Street in New York City; buying the Herald block in downtown Calgary; investing
in the 77 K Street development in Washington, D.C.;
and through the acquisition of Trizec, adding
development assets in the Washington, D.C. area,
Houston and potentially Los Angeles.
Residential Development
Our residential land development business, based largely in the energy-dominated western Canadian province of Alberta, had another record year. Given an unemployment rate of 2.7% and 60,000 new jobs created in Alberta in 2006, the demand for new
housing remains strong and has pushed margins up by almost 50% over the past 12 months. Competition for labor and materials has had a somewhat mitigating impact through increasing project costs as well
as timelines. The net effect of this is a reduction
of home and lot sales by 14% year over year, but this
was more than offset by margin increases.
Outlook
For 2007, our strategic plan remains similar to
that which we shared with you last year. Our goals and objectives can best be summarized in the
following principle themes:
- Create value within our portfolio through proactive
leasing and asset management given the ongoing
improvement in office fundamentals;
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- Enhance returns by expanding sources of
managed capital;
- Originate fund assets through acquisition or vend-ins;
- Monetize our significant development pipeline
on a measured reward basis;
- Continue to support our residential land
development operations, working to improve
performance through innovation; and
- With the recent expansion of our office operations,
through recruiting, training, realignment of duties
and systems upgrades, make the necessary adjustments to remain a best-in-class operating company.
We would like to acknowledge outgoing board member Bill Wheaton; we are most grateful for
his contributions over the past three years.
We continue to be excited about future prospects for Brookfield Properties and, on behalf of the
management and Board of Directors, we thank
you for your continued support.
Richard B. Clark
President & Chief Executive Officer
February 7, 2007 |
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