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Blackstone Selling Last Assets Acquired In $39B Equity Office Purchase

San Francisco's Ferry Building

Blackstone is moving toward selling the last remaining assets from its $39B purchase of Equity Office Properties Trust in 2007. Among the properties to hit the sales block in the coming weeks are San Francisco’s Ferry Building, an office park in Santa Monica and a 32-story office tower in Downtown Boston, Bloomberg reports. Blackstone is expected to triple its $3.8B equity investment from the sale of these three properties and a handful of smaller properties. The 2007 Equity Office deal was considered the largest buyout at the time.

The sale of the Ferry Building, a food court and office at a popular ferry terminal, is not an actual building sale. The company is selling its rights to a 66-year ground lease with the Port of San Francisco, a city agency that owns the building, according to the San Francisco Business Times.

The sale is expected to be worth more than $300M ($1,250/SF). The buyer would receive office and retail rents from the building, which includes 175K SF of office space and 65K SF retail. The new landlord would not need to pay property or transfer tax, but would have to pay rent of more than $1M/year to the Port of San Francisco. About 74K SF of office and 18,300 SF of retail is available. Office asking rents are about $95/SF to $100/SF.

The office park in Santa Monica has Snap as its anchor tenant, and the 32-story office tower at 100 Summer St. in Boston includes Bloomberg as a tenant. These three properties make up the bulk of the $2B in assets yet to be sold from that 2007 deal.