When Blackstone purchased Equity Office from Sam Zell people knew that some of the properties would be flipped. What is amazing Wall Street and the commercial real estate community is the speed in which these transactions are occurring. In the 6 months since the deal was announced, Blackstone has sold nearly half of the properties that they purchased in the deal for Equity Office recouping 70 percent of their initial investment.
Typically in big commercial real estate buyouts the properties that are initially sold are the weaker ones. Instead, Blackstone seeing the roaring hot commercial market, they are selling the higher end properties for a huge profit.
Who said the days of flipping real estate are over for a while…
According to data provided by CoStar Group, which tracks the transactions by building, 261 buildings, or 48%, of the 543 buildings that EOP held in February have now been sold.
The mammoth transaction secured the reputation of Jonathan Gray, 37 years old, senior managing director of Blackstone Group, as a young deal maker when he faced down Steven Roth’s Vornado Realty Trust to win a bidding war for Equity Office, a Chicago real-estate investment trust.
Mr. Gray’s signature was to swoop in with certainty and speed, biting off big chunks of real estate while industry investors debated valuations and pored over due diligence documents. It was a style he refined as he took private two large office REITs, CarrAmerica Realty Corp. and Trizec Properties Inc., and then executed in taking down Equity Office. via WSJ.com.