The bulk of Equity Office Properties Trust’s Denver office buildings won’t be acquired by Blackstone Group LP when it buys Equity Office.
Under terms of a deal announced Monday, Blackstone Group LP will buy the company for $20 billion in the largest takeover ever of a real estate company.
Equity Office shareholders will receive $48.50 a share, 8.5 percent more than Friday’s closing price. Including debt, the deal is worth $36 billion, surpassing the $33 billion purchase earlier this year of hospital chain HCA Inc.
“Even though it’s a gigantic deal, it’s not that shocking given the trend in the market to see public real estate entities going private,” said Ann Sperling, senior managing director of Trammell Crow Co. “Over the last two years, there have been scores of public owners of real estate moving private.”
So far this year, companies buying other companies chalked up $3.46 trillion worth of acquisition activity, surpassing the previous record of $3.33 trillion set in 2000, according to Dealogic.
Denver’s largest landlord, Equity Office already has much of its Denver portfolio under contract to two different buyers. The nine buildings it owns in the Denver Tech Center are under contract to CBRE Investors, and three of its five downtown buildings will be sold to Westcore Properties LLC, according to people familiar with those deals. Earlier this year, it sold the 17-story Trinity Place across from the Brown Palace to Broe Real Estate.
The only two Denver properties Blackstone will acquire are the Tabor Center and U.S. Bank building.
Blackstone gained a foothold in the Denver market when it purchased CarrAmerica, a real estate investment trust that holds 1.6 million square feet of property here, including Dry Creek Corporate Center and Panorama Corporate Center.
Nationwide, Blackstone is gaining 580 office buildings spread from New York and Washington to Los Angeles as rents rise and vacancies fall.
“Office properties are increasing in value in the eyes of private equity investors,” said Srikanth Nagarajan, an analyst at RBC Capital Markets in New York.
Buyout firms more than doubled acquisitions of property companies to $16.5 billion this year before the Blackstone announcement, Bloomberg data show.
“There is a frenzy of private equity firms taking these public companies out,” said Todd Roeb ken, managing principal of Cresa Partners in Denver.
The Associated Press and Bloomberg News contributed to this report.
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
This story has been corrected in this online archive. Originally, due to a reporter’s error, it incorrectly named a building Blackstone Group LLC is acquiring from Equity Office Properties. Blackstone is acquiring the Tabor Center and the U.S. Bank Building.
