Brookfield Asset Management Ltd. is exploring the sale of Atlantis Paradise Island Bahamas, and could fetch roughly $2.5 billion for the luxury resort, according to people with knowledge of the matter.
The firm is working with an adviser to solicit potential interest in the sprawling property, which includes multiple hotels, a casino, meeting space and a water park, said the people, who asked not to be identified discussing confidential talks.
A Brookfield spokeswoman declined to comment.
Brookfield, which manages around $850 billion of assets, has owned Atlantis since a 2012 debt restructuring. The resort, developed by the late South African hotelier Sol Kerzner, has hosted New Year’s Eve events headlined by performers including Fergie and Sting. Brookfield has spent $100 million on renovations on Atlantis, and explored selling it in 2019, Bloomberg News reported at the time, before the effort was halted by the pandemic.
The property’s net cash flow has stabilized, DBRS Morningstar said last week in a note to clients about a loan secured by the 2,917-key resort. Combined occupancy for the 12 months through March hit 56.2 percent, a marked increase from 35.5 percent in the year-earlier period. Occupancy has been compressed in part by renovations and room upgrades, according to the ratings firm.
Rising interest rates have roiled the global real estate market, squeezing landlords and weighing on property values.
The impact is more pronounced on office buildings amid low occupancy levels as employees continue working from home, leading to more delinquencies. Brookfield has defaulted on mortgages covering more than a dozen office buildings, mostly in Los Angeles and around Washington, D.C. Recently it handed a receiver control of EY Plaza, a 41-floor tower in Los Angeles, where the downtown office vacancy rate has reached 30 percent.
The Canadian firm, one of the world’s largest owners of prime office properties, had repeatedly said that 95 percent of its office portfolio is either trophy or Class A office space that outperforms the market.
Brookfield sees opportunities in the market. Earlier this year, it started fundraising for its fifth flagship real estate fund. The company is seeking $15 billion for the vehicle, less than its predecessor, Bloomberg reported in June.
“Since the global financial crisis in 2009, we don’t believe there has been a more fruitful environment to execute our longstanding investment strategy: buy high-quality assets for value when their financial structures are compromised, and drive upside through active asset management,” Chief Executive Officer Bruce Flatt and President Connor Teskey said last month in a letter to shareholders.