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Blackstone buys $2bn, sells $2bn

The New York-based private equity and real estate giant has purchased a retail portfolio from American Realty Capital for $1.975 billion just days after selling several Boston office properties to a venture led by Oxford Properties Group for approximately $2.1 billion.

The Blackstone Group has made two massive property transactions in less than one week, purchasing a $1.975 billion US shopping center portfolio from American Realty Capital Properties (ARCP) and selling a $2.1 billion Boston office portfolio to a consortium led by Oxford Properties Group.
 
According to a press release from ARCP, affiliates of Blackstone’s $13.3 billion global real estate fund, Blackstone Real Estate Partners (BREP) VII, intend to buy substantially all of the New York-based REIT’s multi-tenant shopping center portfolio. The all-cash deal, which includes 69 properties located across 26 states, is expected to close within the next month. ARCP will use the proceeds from the sale to fund its recently announced purchase of 500 Red Lobster restaurants for $1.5 billion.
 
“We believe the sale of the multi-tenant portfolio will deliver the best value creation option to our shareholders and serve to enhance the clarity of our single-tenant, net lease investment strategy, further simplifying and rationalizing our business plan,” said Nicholas Schorsch, executive chairman and chief executive officer of ARCP, in a statement.
 
Meanwhile, Blackstone has entered into an agreement to sell five of the Boston office properties that it had acquired through its $39 billion acquisition of Sam Zell's Equity Office Properties in 2007.The buyer is a venture led by Oxford Properties Group, the real estate arm of the Ontario Municipal Employees Retirement System.
 
The deal includes 3.2 million square feet of office space, making it Blackstone’s largest US office sale since the recession, according to data provider Real Capital Analytics (RCA). Blackstone’s sales in office properties increased from $1.8 billion in 2012 to $9 billion last year, as the firm consistently has been selling office properties individually or in small portfolios, according to RCA data. 
 
The deals follow the May 16 news that the New York-based private equity and real estate giant had agreed to buy The Cosmopolitan of Las Vegas from Deutsche Bank for $1.7 billion in cash. The deal also was made on behalf of BREP VII and is expected to close by the first quarter of next year.