Blackstone strikes biggest European RE deal of 2016 with $3.6B OfficeFirst buy

Fund manager to acquire 97 properties and 15M sf in Germany

New York /
Nov.November 08, 2016 03:36 PM

In Europe’s largest property deal this year, private equity giant Blackstone Group has agreed to pay $3.6 billion for OfficeFirst, the real estate subsidiary of Germany’s IVG Immobilien AG.

Last month, IVG — which is one of Germany’s largest property companies — gave up on an initial public offering of OfficeFirst because of investor concerns about market volatility. The company then turned down a private sale offer from Blackstone TRData LogoTINY, which raised the ire of the roughly 30 hedge funds that own it, the Wall Street Journal reported.

But on Tuesday, the two companies reached an agreement. The terms are similar to Blackstone’s offer last month, according to the Journal. Blackstone will pay around 22 euros (roughly $24 USD) per share, Reuters reported.

OfficeFirst has 97 properties worth around 1.3 billion euros, the Journal reported. The deal will add 15 million square feet of mainly office space across six major cities, including Berlin and Frankfurt, to Blackstone’s global portfolio.

In an earnings presentation last month, Blackstone told analysts that its dry powder crossed the $100 billion threshold for the first time. Due to inflated asset prices and interest rates at record lows, Blackstone had difficulty finding highly attractive investments that could yield double-digit returns for its customers.

The company sold $7.2 billion worth of real estate last quarter, thanks largely to the $6.5 billion sale of Strategic Hotels & Resorts to Anbnag Insurance. [WSJ]Miriam Hall


Related Articles

arrow_forward_ios
Main-MainImage_.psd FT-Thumbnail_.psd
Blackstone to net $4B profit in sale of Vegas casino
Blackstone to net $4B profit in sale of Vegas casino
Blackstone Group's Stephen Schwarzman, KKR's Henry Kravis and Apollo's Leon Black (Getty, Facebook, iStock)
Blackstone, Apollo, KKR take market hit on Evergrande tumult
Blackstone, Apollo, KKR take market hit on Evergrande tumult
The Cosmopolitan of Las Vegas at 3708 Las Vegas Blvd S and Blackstone CEO Stephen Schwarzman (Google Maps, Getty)
Blackstone marketing Cosmopolitan Las Vegas for $5B
Blackstone marketing Cosmopolitan Las Vegas for $5B
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
Rendering of 227 West Street with Brookfield's Brian Kingston and Blackstone's Katie Keenan (OMA, Brookfield, Blackstone)
Brookfield lands $500M for next Greenpoint Landing development
Brookfield lands $500M for next Greenpoint Landing development
Blackstone eyes return to hotel business as real estate fuels strong Q2
Blackstone eyes return to hotel business as real estate fuels strong Q2
Blackstone eyes return to hotel business as real estate fuels strong Q2
Starrett-Lehigh Building at 601 West 26th Street and 1740 Broadway (iStock, EQ Office, Suma Industries)
Commercial landlords shake up offices to lure tenants back
Commercial landlords shake up offices to lure tenants back
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...