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INVESTMENT PROPERTIES (Tables)
 12 Months Ended
Dec. 31, 2022
Investment property [abstract]  
Schedule of roll forward of investment property balances
The following table presents a roll forward of investment property balances for the years ended December 31, 2022 and 2021:
 
 Year ended Dec. 31, 2022Year ended Dec. 31, 2021
(US$ Millions)Commercial
properties		Commercial
developments		TotalCommercial
properties		Commercial
developments		Total
Balance, beginning of year$62,313 $2,300 $64,613 $70,294 $2,316 $72,610 
Changes resulting from:    
Property acquisitions760 — 760 491 80 571 
Capital expenditures870 428 1,298 796 758 1,554 
Property dispositions(1)
(307)(1)(308)(1,299)(351)(1,650)
Fair value (losses) gains, net(1,122)64 (1,058)1,791 171 1,962 
Foreign currency translation(1,528)(149)(1,677)(558)(37)(595)
Transfers between commercial properties and commercial developments387 (387)— 635 (635)— 
Impact of deconsolidation due to loss of control(2)
(575)— (575)— — — 
Manager Reorganization(3)
6,321 758 7,079 — — — 
Reclassifications of assets held for sale and other changes(1,052)(495)(1,547)(9,837)(2)(9,839)
Balance, end of year(4)
$66,067 $2,518 $68,585 $62,313 $2,300 $64,613 
(1)Property dispositions represent the carrying value on date of sale.
(2)The partnership deconsolidated its investment in a subsidiary as a result of the dilution of its interest. Prior to the transaction, the partnership's interest was consolidated and is now reflected as a financial asset.
(3)See Note 32, Related Parties for further information on the Manager Reorganization.
(4)Includes right-of-use commercial properties and commercial developments of $1,045 million and $127 million, respectively, as of December 31, 2022 (2021 - $557 million and $24 million, respectively). Current lease liabilities of $122 million (2021 - $118 million) has been included in accounts payable and other liabilities and non-current lease liabilities of $810 million (2021 - $558 million) have been included in other non-current liabilities.
Schedule of key valuation metrics for investment properties
The key valuation metrics for the partnership’s consolidated commercial properties are set forth in the following tables below on a weighted-average basis:

  Dec. 31, 2022Dec. 31, 2021
Consolidated propertiesPrimary valuation
method		Discount
rate		Terminal
capitalization
rate		Investment
horizon
(yrs.)		Discount
rate		Terminal
capitalization
rate		Investment
horizon
(yrs.)
Core OfficeDiscounted cash flow6.8 %5.4 %116.5 %5.3 %11
Core RetailDiscounted cash flow7.2 %5.3 %107.0 %5.3 %10
LP Investment(1)
Discounted cash flow9.1 %6.3 %89.4 %7.0 %8
(1) The valuation method used to value multifamily and manufactured housing properties is the direct capitalization method. At December 31, 2022, the overall implied capitalization rate used for properties using the direct capitalization method was 4.3% (December 31, 2021 - 4.3%).
The following table presents the valuation techniques and inputs of the partnership’s Level 2 assets and liabilities:
 
Type of asset/liability Valuation technique
Foreign currency forward contracts Discounted cash flow model - forward exchange rates (from observable forward exchange rates at the end of the reporting period) and discounted at a credit adjusted rate
Interest rate contracts Discounted cash flow model - forward interest rates (from observable yield curves) and applicable credit spreads discounted at a credit adjusted rate
 
The table below presents the valuation techniques and inputs of Level 3 assets:
 
Type of asset/liability Valuation techniques Significant unobservable input(s) Relationship of unobservable input(s) to fair value
Securities - FVTPL/FVTOCI Net asset valuation (a) Forward exchange rates (from observable forward exchange rates at the end of the reporting period)
(b) Discount rate		 (a) Increases (decreases) in the forward exchange rate would increase (decrease) fair value
(b) Decreases (increases) in the discount rate would increase (decrease) fair value
Schedule of investment properties measured at fair value
The following table presents the partnership’s investment properties measured at fair value in the consolidated financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above in Note 2(i), Summary of Significant Accounting Policies, Fair value measurement.
 
Dec. 31, 2022Dec. 31, 2021
Level 3Level 3
(US$ Millions)Level 1Level 2Commercial propertiesCommercial developmentsLevel 1Level 2Commercial propertiesCommercial developments
Core Office$— $— $22,129 $1,355 $— $— $24,644 $1,023 
Core Retail— — 19,438 106 — — 18,991 — 
LP Investments— — 24,500 1,057 — — 18,678 1,277 
Total$— $— $66,067 $2,518 $— $— $62,313 $2,300 
(1)Represents excess land held for capital appreciation rather than an operating hotel asset.
The following table outlines financial assets and liabilities measured at fair value in the financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above:
 
 Dec. 31, 2022Dec. 31, 2021
(US$ Millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Financial assets        
Securities designated as FVTPL10 305 2,208 2,523 17 218 1,965 2,200 
Securities designated as FVTOCI36 — 69 105 13 — 95 108 
Derivative assets— 294 — 294 — 144 — 144 
Total financial assets$46 $599 $2,277 $2,922 $30 $362 $2,060 $2,452 
Financial liabilities        
Capital securities - fund subsidiaries$— $— $577 $577 $— $— $859 $859 
Derivative liabilities— 538 — 538 — 498 — 498 
Total financial liabilities$— $538 $577 $1,115 $— $498 $859 $1,357 
The following table presents the change in the balance of financial assets and financial liabilities classified as Level 3 as of December 31, 2022 and 2021:
 
 Dec. 31, 2022Dec. 31, 2021
(US$ Millions)Financial
assets		Financial
liabilities		Financial
assets		Financial
liabilities
Balance, beginning of year$2,060 $859 $1,682 $863 
Additions353 — 553 — 
Dispositions(222)— (88)— 
Fair value (losses) gains, net and OCI86 (292)366 2 
Other— 10 (453)(6)
Balance, end of year$2,277 $577 $2,060 $859 
Schedule of sensitivity analysis
The following table presents a sensitivity analysis to the impact of a 25 basis point (“bps”) increase of the discount rate and terminal capitalization or overall implied capitalization rate (“ICR”) on fair values of the partnership’s commercial properties for the year ended December 31, 2022, for properties valued using the discounted cash flow or direct capitalization method, respectively:

Dec. 31, 2022
(US$ Millions)Impact of +25bps DRImpact of +25bps TCRImpact of +25bps DR and +25bps TCR or +25bps ICR
Core Office$487 $732 $1,199 
Core Retail384 643 1,012 
LP Investments(1)
757 605 1,357 
Total$1,628 $1,980 $3,568 
(1)The valuation method used to value multifamily, student housing, and manufactured housing properties is the direct capitalization method. The impact of the sensitivity analysis on the discount rate includes properties valued using the DCF method as well as properties valued using an overall implied capitalization rate under the direct capitalization method.