Brookfield Properties Corp., a commercial real estate landlord with residential assets of $1.2 billion, plans to leave the housing business to focus on owning and running office space.

Brookfield is in talks to merge its Carma Development unit, known for building homes in oil-rich towns of western Canada and Texas, with Brookfield Asset Management's Brookfield Homes Corp.

Brookfield Properties also plans to pay Brookfield Asset Management $1.4 billion for a 41% stake in 16 Australian office holdings, the companies said Friday.

Brookfield Properties, a subsidiary of Brookfield Asset Management in Toronto, will change its name to Brookfield Office Properties Inc. to reflect the shift in focus.

"This strategy will position Brookfield Properties at the forefront of the global office property scene," Brookfield Properties Chief Executive Officer Richard "Ric" Clark said in a press release.

Brookfield Properties' home-building unit contributed about $33 million in revenue in the second quarter, the New York company said.

On completing the deal Brookfield Office Properties would have 62 office properties in the U.S., 31 in Canada, 16 in Australia and one in the U.K.

The deal is expected to close in the third quarter.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.