WSJ: Blackstone To Sell Boston Office Buildings For $2.1 Bln

(RTTNews) - Private equity firm Blackstone Group L.P. (BX) has agreed to sell five high-rise office towers in Boston to a consortium of buyers led by Canadian real estate firm Oxford Properties Group for about $2.1 billion, the Wall Street Journal reported Sunday, citing people familiar with the deal.

Blackstone purchased the Boston properties as part of its acquisition of billionaire Sam Zell's Equity Office Properties Trust for $39 billion in 2007, prior to the financial crisis.

Blackstone has resold several of these properties to buyers, including real estate tycoon Harry Macklowe, in order to pay down debt. However, the company has continued to retain several large holdings in Boston and California.

The commercial real estate market in the U.S. has recovered since the financial crisis wreaked havoc on Equity Office properties and created big losses for Macklowe. The Boston properties being sold by Blackstone reportedly includes 3.2 million square feet of office space, mostly in downtown Boston, and will represent Blackstone's biggest U.S. office sales since the financial crisis.

Oxford Properties is the real estate unit of Ontario Municipal Employees Retirement System that oversees about $20 billion of assets it manages for itself and on behalf of partners. Other bidders on the Boston portfolio reportedly include the Government of Singapore, and a joint venture of Norway's sovereign wealth fund and MetLife Inc. (MET).

According to the WSJ report, Oxford will buy all of 100 High St and 125 Summer St, and partner with JPMorgan Chase & Co.'s (JPM) asset-management arm to buy the remaining three office towers - 60 State St, 225 Franklin St and One Memorial Drive.

Blackstone will also reportedly sell its stake in a sixth Boston building, Rowes Wharf, to its existing partner in the property, Morgan Stanley (MS).

BX closed Friday's trading at $29.20, up $0.13 or 0.45 percent on a volume of 3.42 million shares.