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Tuesday, November 28 2006 @ 10:18 AM Central Standard Time
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 Silicon Valley, CA--- The Blackstone Group plans to acquire approximately 5 million square feet of this area from public ownership to acquire Equity Office Properties. New-York based Blackstone Group, an established real estate company, once the 7 million square feet South Bay deal is furnished, will make them one of the largest property owners in the said location.
With a great deal of $36 Billion by private companies, it is noted that the transaction would result from a concise perspective that would eventually make the deal push through.
Jim Beeger, a broker from Comish and Carey Commercial says It allows them to be more entrepreneurial, with any publicly held company, there are a lot of checks and balances. They're good people, but they all have to talk to each other about a deal.
But John Michael Sobrato, says otherwise. His own company, Sobrato Development, owning 9.5 million square feet in the South Bay, believes the impact is negligible.
"Ownership of real estate in the Valley is so fractionalized that even a consolidation of this size doesn't make enough of a difference to change anything,'' Sobrato said. "It's one institution buying another, and neither were in local hands to begin with.''
Apparently, Blackstone sold most of Carr's Washington, D.C. properties after buying the CarrAmerica portfolio.
One sector of the market that is clearly affected by the privatization of Equity Office is the investor
Allen Cymrot investment guru and a founder of the Web site, NetGainRealEstate.com said,``this will remove from the marketplace a very large, capable real estate investment trust that individual investors had bought before. ``A lot of Americans were able to invest in appreciation of real estate because REITs have been very successful investments for the past five years. This is taking away some of the opportunity for investors.''
A marked 60 percent of the buying and selling activity in the publicly traded real estate market involved public companies buying one another since the Blackstone Group announced its proposal to Equity Office Properties. Also, the percentage shift from the announcement made such an impact from 60 percent to 43 percent of the dollar volume in 2006.
Ron Kuykendall, vice president of communications for the National Association of Real Estate Investors, said that while Equity Office is certainly large, the entire industry is valued at $424 billion.
``By any measure, $36 billion is a big deal, but this is just one event,'' Kuykendall
said. ``We're not talking about a significant difference in the overall real estate investment trust market as the result of the privatization of Equity Office.''
Jade Amethyst
http://www.miamirealestateinc.com |
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