Blackstone Group President Steve Schwarzman and 1411 Broadway

The Blackstone Group wants to unload its 51 percent stake in 1411 Broadway, Crain’s reported. The private equity firm has given the building’s co-owner, San Francisco-based Swig Company, an exclusive window to take the stake or find a partner.

Swig Company — which was founded by Kent Swig’s grandfather, but the financially troubled New York developer is not involved in its operations — developed the 40-story, 1.2 million-square-foot office tower between West 39th and West 40th streets in 1970 with Jack Weiler. [more]

Blackstone CEO Stephen Schwarzman

Park Avenue-based Blackstone Group and a Morgan Stanley property fund are seeking control of a 23 million-square-foot industrial real estate portfolio, the Wall Street Journal reported. The portfolio includes a total of 95 properties in California, Arizona, Texas and other states.

The portfolio, known as CalWest and owned by Walton Street Capital, has an anticipated default in June. For the past two years, the Journal reported, Blackstone has collected pieces of CalWest’s junior debt in an effort to take over. [more]

1095 Sixth Avenue retail

After months of filling its prime Bryant Park retail space with pop-up shops, Blackstone Group is finally on the verge of landing a long-term tenant for 1095 Sixth Avenue. According to the New York Post, Nordstrom Rack, the off-price division of luxury department store Nordstrom, is closing in on the 32,000 square feet at the base of the redesigned glass tower. [more]

From left: Knickerbocker Hotel and a rendering of the hotel coming to 136 West 42nd Street

The high-profile block of West 42nd Street between Sixth and Seventh avenues has long needed an upgrade, according to the New York Post, and after tracking developments on the block it’s clear that progress is being made.

The partnership of Highgate Holdings, Crown Acquisitions and Ashkenazy Acquisitions has completed interior demolition work in its bid to revert the former Knickerbocker Hotel, at 1466 Broadway, back to a luxury hotel from Class B office space. [more]

Goldman Sachs, the Blackstone Group and several other notable investors have turned bullish on the U.S. housing market, the Wall Street Journal reported, buying up shares of home building companies, like Pulte Group, Beazer Homes and Hovnanian Enterprises. Those stocks are up 30 percent since the end of the third quarter, according to Dow Jones, far outpacing the 10.5 percent increase recorded by the Standard & Poor’s 500.

In a recent report, Goldman said it expects home prices to decline 3 percent next year, before gaining 30 percent — not taking inflation into account — through 2022 [more]

From left: Tishman Speyer CEO Jerry Speyer, Hines Interests Chairman Gerald Hines and Simon Property Group CEO David SimonAs commercial construction remains stagnant in America, several high-profile American developers have turned to China for new projects, including several with notable ties to New York.

But for all the obstacles these developers are accustomed to encountering in the city, according to the New York Times there are even more hurdles to clear in China.

In addition to the obvious language and cultural barriers — for example, the Chinese do not consider a contract a binding agreement, and disputes with tenants are better settled over dinner than in a court room — unpredictable policy, layers of bureaucracy and the necessity of building local relationships make the prospect of development difficult. [more]

Sam Zell and an Archstone building at 800 Sixth Avenue

Sam Zell’s Equity Residential has emerged as the leading bidder in a race to buy 53 percent of rival Archstone, offering more than $2.5 billion in cash for the stake, currently held by Bank of America and Barclays, the Wall Street Journal reported. The rest of the company, a real estate investment trust, is owned by the bankruptcy estate of Lehman Brothers Holdings.

The proposed sale to Equity Residential would value Archstone at about $16 billion, the Journal said. If sold as a whole company, Archstone currently could be worth as much as $18 billion.

Real estate giants the Blackstone Group, Brookfield Asset Management, Equity Residential and AvalonBay Communities have all submitted bids for Archstone in recent months, it was previously reported. [more]

Equity Office, an affiliate of the Blackstone Group, which just purchased the upper 12 floors of the 15-story former New York Times building at 229 West 43rd Street, has turned the publisher’s dining room into a basketball court in an effort to attract prospective tenants, the Times reported.

The real estate giant has been pulling out all the stops to draw positive attention to the building, most of which has been vacant since the Times moved on in 2007. A 12th floor terrace has also been landscaped in Blackstone’s version of the High Line, Josh Glick, the asset manager for Equity Office, joked.
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Anglo Irish Bank protestFrom the October issue: The auction of Anglo Irish Bank’s troubled $9.5 billion U.S. loan portfolio has surprised some industry observers — and spread fear among some borrowers, who worry about having new lenders take over their troubled projects.

Ben Thypin, a senior market analyst at Real Capital Analytics, said the fact that three lenders divvied up Anglo Irish’s portfolio was” not particularly unexpected.”

“No one but a bank could really afford to buy the performing loans, so the performers and non performers inevitably went to different buyers,” he said.

But what was surprising was who ended up at the winners’ table — Lone Star Funds acquired about $5 billion in sub- and nonperforming loans, while Wells Fargo and JPMorgan Chase acquired the remaining performing loans in separate transactions.
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The Carlyle Group is going ahead with its initial public offering plans, even though its valuation is at $8.5 billion, only a little more than half the valuation of its competitor, Blackstone Group, the New York Post reported.

The reason is that Wall Street doesn’t place as high a value on the money it makes from buying and selling companies, according to the Post. Blackstone has $15.3 billion in enterprise value, although the two private equity firms have roughly the same $150 billion in assets under management.

Steven Schwarzman’s Blackstone has a higher valuation because it has diversified into advisory services such as corporate restructuring, while David Rubenstein’s Carlyle still depends heavily on buyout deals. It has not been able to persuade bankers that it was worth as much as Blackstone because could promise steadier earnings. Carlyle recently placed two Midtown development sites on the market in a joint venture with Extell Development.
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