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The Blackstone Group L.P. Message Board

  • pedrojose1967 pedrojose1967 Aug 26, 2007 7:38 AM Flag


    Tishman closes on office towers

    Sun Aug 26 00:05:51 2007 EDT
    Aug 25, 2007 (Chicago Tribune - McClatchy-Tribune Information Services via COMTEX
    News Network) --
    The Chicago real estate community heaved a sigh of relief Friday as Tishman Speyer
    Properties closed on one of the city's biggest-ever property sales.
    Despite the turmoil in the real estate industry and the financial markets
    that have put some deals on hold here and around the country, Tishman paid approximately
    $1.72 billion to Blackstone Group LP for seven downtown office buildings, said a
    source close to the deal.
    At the same time, Tishman closed on the $131 million sale of one of those
    buildings, 101 N. Wacker Drive, to Houston-based Hines Interests LP.
    However, the unsettled market conditions led Tishman to drop its plan to
    sell two other towers from the portfolio, which Blackstone acquired in its leveraged
    buyout of Equity Office Properties Trust.
    As that news ricocheted through real estate circles, some local investors
    questioned whether the deal between Blackstone, a New York-based private-equity
    firm, and Tishman, a major New York-based real estate investment, development and
    management firm, would be delayed.
    But with a deposit of $100 million or more to ensure that it completed the
    sale, "Tishman couldn't walk away," said one industry source.
    That it was able to close on the sale to Hines also "showed that there's
    still value in the market," said another investor.
    But current market conditions have resulted in several real estate deals
    falling through nationwide. During the 12 months ended July 31, about $7 billion
    in real estate sales that were agreed to failed to close, according to a study released
    this week by the research firm Real Capital Analytics Inc.
    That was the largest number of deals to fall out of contract in the past
    four years, said Dan Fasulo, a Real Capital Analytics managing director. Throughout
    the country, "we can conclude that a number of deals fell out of contract, but cannot
    find evidence that real estate fundamentals [rents, leasing, vacancy rates] are
    a problem," he said. "Commercial real estate will remain strong unless there's a
    weakening of the economy or the real estate fundamentals."
    To see more of the Chicago Tribune, or to subscribe to the newspaper, go
    to Copyright (c) 2007, Chicago Tribune Distributed by
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    847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite
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