Opening a Door
Will the recent announcement by the Blackstone Group to purchase Sam Zell’s Equity Office Properties Trust for $19 billion open the door to investors that other real estate companies are available for the buying? This deal is the third purchase this year for Blackstone of a real estate investment trust and its 10th in two years, including 2006 deals for CarrAmerica Realty Corp. and, with partner Brookfield Properties Corp., for Trizec Properties Inc.
Some are speculating on the ramifications this blockbuster deal with have on the commercial market. Whether this transaction is simply a reflection of what is currently seen as a shrinking public real estate market or the current trend of capital-flushed private equity firms lusting for leveraged buyouts is up for interpretation by the experts. A more likely scenario is that its a combination of both factors at play.