- No final sale has been closed yet, but the fund received a non-binding offer of R$ 760 million for Passeio Corporate and a memorandum of understanding of R$ 16 million for a floor at the E-Tower.
- The distribution was maintained at R$ 0.58 per unit, but cash generation dropped to R$ 0.568, requiring R$ 0.012 per unit from the earnings reserve.
- Physical vacancy rose from 9.4% to 10.0% following Macquarie's departure and Stone's early termination notice.
The liquidation thesis for the Brazilian real estate fund BROF11 has moved from a distant unitholder meeting promise to actual offers on the table. The bids received by BGR Asset total R$ 776 million in properties, accelerating portfolio recycling just as physical vacancy shows renewed pressure.
Did BROF11 Sell Its Property?
Not with a final signed contract yet. BROF11 has not concluded the final sale of any building as of the close of September, but it has formalized concrete progress on asset sales. On September 29, 2026, management received a non-binding offer of R$ 760.0 million to sell 100% of the Passeio Corporate building, located in downtown Rio de Janeiro.
A few days later, on October 7, 2026, the manager signed a Memorandum of Understanding (MoU) for the potential sale of the 33rd floor of the E-Tower building in São Paulo for R$ 16.0 million. Combined, the two negotiations total R$ 776.0 million, putting the unitholder-approved strategy for direct asset sales into practice.
Non-binding offer for 82,859 sqm of GLA (09/29/2026).
Memorandum of Understanding for the 33rd floor / 627.69 sqm (Jul 10, 2026).
Corresponds to more than 60% of the fund's total market value.
It is vital to understand the stage of each document. A non-binding proposal signals buying intent and sets a starting price, but it still goes through due diligence, fulfillment of conditions precedent, and approval of definitive contracts. Meanwhile, a Memorandum of Understanding sets exclusivity periods and advances negotiations toward the final contract.
What Are the Terms of the R$ 760 Million Passeio Corporate Offer?
The offered price is R$ 760.0 million for the entire property. Passeio Corporate is the backbone of BROF11: the development accounts for 83% of the fund's net rental revenue and features 82,859 sqm of owned GLA in downtown Rio de Janeiro.
BGR Asset had argued that the trading discount on the exchange—units were quoted at R$ 62.57 against a book value of R$ 108.62 (a price-to-book ratio of 0.58)—did not reflect the quality of the portfolio's AAA slabs. The arrival of a buyer willing to pay R$ 760 million puts the liquidity of Rio's commercial real estate market to the test.
If the sale of Passeio Corporate is finalized on the proposed terms, the proceeds will allow the fund to fully amortize its real estate receivable certificate (CRI) debt balance (R$ 185.5 million), eliminating its main financial expense, and distribute a substantial amount of capital amortization to unitholders.
Why Did the R$ 0.58/Unit Distribution Require Drawing on Reserves in September?
Because cash generation per unit fell short of the distribution. In September 2026, BROF11 generated cash results of R$ 0.568 per unit (totaling R$ 6.59 million), down from R$ 0.609 per unit in August.
To meet the top end of its market guidance (which projected payments between R$ 0.54 and R$ 0.58 per unit), management distributed R$ 0.580 per unit. This resulted in a payout ratio of 102.11% and required drawing R$ 0.012 per unit from accumulated earnings reserves.
With this one-off usage, the fund's accumulated earnings reserves dropped from R$ 6.89 million in August to R$ 6.73 million in September. Although the fund still holds a buffer equivalent to about R$ 0.58 per unit in total reserves, the loss of momentum in rental cash flow raises a yellow flag for maintaining distributions if new vacancies arise before asset sales are completed.
How Does BROF11's Vacancy Look Following the Departures of Stone and Macquarie?
Consolidated physical vacancy rose to 10.0% in September. The occupancy rate, which had fallen to 9.4% in July with SBM's expansion at Passeio Corporate, climbed back up due to dual departures from the portfolio.
At the E-Tower building, Macquarie formally returned the 627.69 sqm on the 33rd floor on September 30, pushing vacancy at the São Paulo property up to 11.7%. Management's response was swift: the vacant space immediately became the subject of a Memorandum of Understanding for a R$ 16.0 million sale in October.
At Passeio Corporate, Stone notified the fund of its early termination of 1,675.57 sqm, pushing vacancy at the Rio building to 9.8%. Additionally, the report indicates expected space returns by Biogen in October 2026. Caixa Econômica Federal remains the property's primary anchor, single-handedly accounting for 38% of the fund's net revenue.
What Impact Do Property Sales Have on the Fund's CRI Debt?
It eliminates the financial expense weighing on distributions. BROF11 ended September with an outstanding balance of R$ 185.5 million in Real Estate Receivables Certificates (CRI). The debt carries an interest rate of IPCA + 8.25% per year and a loan-to-value (LTV) ratio of 13.0% relative to total assets (valued at R$ 1.42 billion).
Currently, this debt service consumes more than R$ 1.6 million per month from cash flow under operating and financial expenses. The CRI contract structure allows it to function as a bridge loan with extraordinary amortization permitted in the event of asset liquidations.
If sales of Passeio Corporate and the E-Tower floor move forward, paying off the CRI will be the mandatory first step. Without the drag of the IPCA + 8.25% financial cost, remaining net income per unit will be entirely clean for direct distribution to unitholders until the fund winds down.
What Changes in Practice for BROF11 Unitholders Now?
If you hold BROF11 in your portfolio, the focus has shifted from pure rental income to the execution of sale contracts. Units trading at R$ 62.57 carry a significant discount compared to book value of R$ 108.62. The arrival of R$ 776 million in offers proves buying interest, but requires paying attention to due diligence timelines. Until funds land in the account, the monthly R$ 0.58 dividend will depend on continuously drawing from the R$ 6.73 million reserve to cover Stone and Biogen's lease terminations.
The BROF11 investment thesis is now guided by the timeline for closing these offers. With overall vacancy for class AAA office space in Rio de Janeiro falling to 23.5% (according to market data cited by management), Passeio Corporate's attractiveness to institutional investors has grown.
What to Monitor in BROF11 Over Coming Months
To track the conversion of proposals into actual portfolio value, keep an eye on these quantitative triggers:
Conversion of the Passeio Corporate offer — A material fact confirming the signing of the definitive R$ 760.0 million contract or a call for a unitholder meeting.
Closing of the E-Tower MoU — Signing of the deed to sell the 33rd floor for R$ 16.0 million and the resulting cash inflow for partial CRI amortization.
Earnings Reserve Drawdown — Maintaining residual balances above R$ 6.0 million (compared to R$ 6.73 million in September) to support guidance of R$ 0.54 to R$ 0.58 per unit while Stone's vacancy takes effect.
The R$ 776 million in offers validate our divestment thesis and provide the concrete catalyst the market has been waiting for to unlock the 0.58 price-to-book ratio. Investors should remain patient with the bureaucratic timelines required to finalize sales, while recognizing that operating income faces temporary vacancy pressures ahead of liquidity events.
