Breaking News: Blackstone Buys a Billion

Blackstone has just spent $1.1 billion on an 82-building, 10.1 MSF portfolio, buying suburban office assets in seven markets across the Midwest and South from Duke Realty Corp.

October 21, 2011
By Nicholas Ziegler, News Editor

Blackstone Real Estate Partners VII has been making some big moves lately. A month after its $473.1 million purchase of 36 shopping centers from Equity One, Inc., the firm has spent $1.1 billion on an 82-building portfolio from Duke Realty Corp. The aggregate 10.1 million square feet of suburban office buildings is located in seven markets across the Midwest and South: Atlanta, Chicago, Columbus, Dallas, Minneapolis, Orlando and Tampa.

Duke’s chairman characterized the deal as a strategic move to reduce investment in the sector, primarily in the Midwest markets. “The transaction generates over $1 billion of capital for the acquisition and development of industrial and medical office assets and to further de-lever the company’s balance sheet consistent with our strategic capital plans,” Denny Oklak, Duke’s chairman & CEO, said.

Duke officials further stated that their company’s intent in selling the assets were to reposition investment allocations of 60 percent industrial, 25 percent office and 15 percent medical office.

The portfolio is 84.6 percent leased, and the 82 buildings have an average age of 15 years. Blackstone will assume leasing and property-management responsibilities for the portfolio.

The transaction is expected to close in December 2011.