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New York

Zell’s former real estate empire crumbles

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Sam Zell’s sale of his 573-property portfolio to the Blackstone Group in 2007 for $39 billion was the largest private equity deal in history. Blackstone flipped hundreds of the buildings right after the purchase for $27 billion. But today, many of the 16 companies that purchased Zell’s Equity Office Properties Trust buildings are facing debt and are unable to fill the millions of square feet of office space they purchased. If the building owners can’t make their loan payments, pension funds, hedge funds and insurance companies could also be affected. In New York City, Harry Macklowe has already lost seven Equity Office towers after he was unable to refinance his debt.