FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

management agreement in limited circumstances relating to enforcement of the property managers’ obligations.In addition, the sale or transfer of interests in some of our joint ventures and partnerships is subject to rights offirst refusal or first offer and some joint venture and partnership agreements provide for buy-sell or similararrangements. Such rights may be triggered at a time when we may not want to sell but we may be forced to doso because we may not have the financial resources at that time to purchase the other party’s interest. Such rightsmay also inhibit our ability to sell an interest in a property or a joint venture or partnership within our desiredtime frame or on any other desired basis.We are subject to risks associated with commercial property loans.We have interests in loans or participations in loans, or securities whose underlying performance depends onloans made with respect to a variety of commercial real estate. Such interests are subject to normal credit risks aswell as those generally not associated with traditional debt securities. The ability of the borrowers to repay theloans will typically depend upon the successful operation of the related real estate project and the availability offinancing. Any factors which affect the ability of the project to generate sufficient cash flow could have amaterial effect on the value of these interests. Such factors include, but are not limited to: the uncertainty of cashflow to meet fixed obligations; adverse changes in general and local economic conditions, including interest ratesand local market conditions; tenant credit risks; the unavailability of financing, which may make the operation,sale, or refinancing of a property difficult or unattractive; vacancy and occupancy rates; construction andoperating costs; regulatory requirements, including zoning, rent control and real and personal property tax laws,rates and assessments; environmental concerns; project and borrower diversification; and uninsured losses.Security underlying such interests will generally be in a junior or subordinate position to senior financing. Incertain circumstances, in order to protect our interest, we may decide to repay all or a portion of the seniorindebtedness relating to the particular interests or to cure defaults with respect to such senior indebtedness.We invest in mezzanine debt, which can rank below other senior lenders.We invest in mezzanine debt interests in real estate companies and properties whose capital structureshave significant debt ranking ahead of our investments. Our investments will not always benefit from the same orsimilar financial and other covenants as those enjoyed by the debt ranking ahead of our investments or benefitfrom cross-default provisions. Moreover, it is likely that we will be restricted in the exercise of our rights inrespect of our investments by the terms of subordination agreements with the debt ranking ahead of themezzanine capital. Accordingly, we may not be able to take the steps necessary to protect our investments in atimely manner or at all and there can be no assurance that the rate of return objectives of any particularinvestment will be achieved. To protect our original investment and to gain greater control over the underlyingassets, we may elect to purchase the interest of a senior creditor or take an equity interest in the underlying assets,which may require additional investment requiring us to expend additional capital.We are subject to risks related to syndicating or selling participations in our interests.The strategy of the finance funds in which we have interests depends, in part, upon syndicating or sellingparticipations in senior interests, either through capital markets collateralized debt obligation transactions orotherwise. If the finance funds cannot do so on terms that are favorable to us, we may not make the returns weanticipate.We face risks relating to the legal aspects of mortgage loans and may be subject to liability as a lender.Certain interests acquired by us will be subject to risks relating to the legal aspects of mortgage loans.Depending upon the applicable law governing mortgage loans (which laws may differ substantially), we may beadversely affected by the operation of law (including state or provincial law) with respect to our ability toforeclose mortgage loans, the borrower’s right of redemption, the enforceability of assignments of rents, due onsale and acceleration clauses in loan instruments, as well as other creditors’ rights provided in such documents.In addition, we may be subject to liability as a lender with respect to our negotiation, administration, collection17