Blackstone disposing of commercial properties recently acquired from Equity Investments Group

Hmm... Apparantly it seems likely Sam Zell sold down his commercial properties to Blackstone at a discount to market value. Blackstone probably has a better network of disposing all the properties. I have this nagging feeling Sam Zell has a long term "short" on US commercial properties.


Blackstone to Sell Atlanta Stake to Macquarie Office (Update2)
By Garfield Reynolds

June 15 (Bloomberg) -- Blackstone Group LP agreed to sell 50 percent of an Atlanta building to Australia's Macquarie Office Trust, as the buyout firm offloads assets acquired in its $39 billion takeover of Equity Office Properties Trust.

Macquarie Office will pay $122 million for the rest of Promenade II it didn't already own, the Sydney-based real estate investment trust said in a statement today. A venture of Macquarie Office and Blackstone had jointly owned five office buildings with a combined value estimated at $1.4 billion.

The venture will sell the most valuable of the remaining buildings, 10 and 30 South Wacker Drive in Chicago, which was worth about $514 million in June 2006, Macquarie Office said. Blackstone holds a 75 percent stake in that building, which has about 2 million square feet of rental space.

New York-based Blackstone has been selling off properties acquired in February when it completed what was then the biggest leveraged buyout by acquiring billionaire Sam Zell's real estate investment trust. A group led by Kohlberg Kravis Roberts & Co. and TPG Inc. has since agreed to buy TXU Corp. for about $46.7 billion, including assumed debt.

Macquarie Office acquired its half of Promenade II for $86 million in 2004 and the building's total worth was estimated at $223 million in December.

Macquarie Office and Blackstone are discussing the remaining properties they jointly own, the Australian trust said.

The companies each own half of Wachovia Financial Center in Miami, which has an estimated value of $338 million, according to Macquarie Office's Web site.

Macquarie Office owns 75 percent stakes in the SunTrust Center in Orlando, Florida, and the Pasadena Towers in California. The Orlando building was estimated at $139 million in 2004 and the Pasadena block was valued at $177 million in December.

Shares in Macquarie Office fell 2 cents to A$1.63 in Sydney, giving the company a market value of A$3.3 billion ($2.7 billion).