Brookfield to borrow $1B of its $1.3B Aveo purchase from banks

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Reuters is reporting that Canada’s Brookfield is taking up to $1B in funding from ANZ, Bank of China and Britain’s Barclays and quotes borrowing interest rates of 2.0% to 2.5% above the current going Bank Bill market rate, which is around 1%.

This means Brookfield only needs to put down $300M to acquire Aveo and then generate $35M operating income to sustain its investment. It has 700 new apartments vacant to sell at ~$500K each ($350M) plus 700 vacant existing village homes to fill and receive the DMF at ~$120K ($84M).

And with these sales the values of the villages will improve, adding many hundreds of millions of dollars more.

Of course, they will have to reinvest to bring many of the older villages up to current market presentation plus the marketing budget will not be insubstantial to generate the sales.

Regardless, the Aveo purchase looks like a great deal for Brookfield – and the village sector, including Aveo’s and all other village residents.

Confidence builds confidence.

Pictured: Bruce Flatt, Brookfield CEO