BPY - Brookfield Property: The Real Reason To Be Concerned By Leverage

Brookfield Property Partners (BPY) (BPR) has built a stalwart reputation over the past several years as a potential core REIT holding. While concerns on the leverage aspect have been brought up with time, the focus has been on whether or not property level underperformance really would mean much risk to the REIT itself due to high levels of non-recourse debt. In my opinion, this discussion misses the real risk to the business model.

Peak to trough in the Great Recession, equity REIT prices fell 67%. However, net operating income ("NOI")

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