The Blackstone Group has agreed to sell a portfolio of West Coast office properties to Arden Realty as the private equity firm continues its massive asset dispoal program in non-core markets. Although the purchase price was not disclosed, news reports have pegged the sale price in excess of $2 billion (€1.5 billion).
The portfolio consists of 38 assets comprising 106 office buildings and 5.9 million square feet in San Diego, Orange County, San Francisco, Seattle, Portland and Salt Lake City. Blackstone acquired the properties last year via its $5.6 billion privatization of CarrAmerica. The portfolio is reportedly 82 percent leased.
A spokesperson for The Blackstone Group declined to comment on the transaction.
The CarrAmerica disposal follows similar moves by Blackstone, which has been busy paring down the large portfolios it has acquired over the past year, including the privatizations of Trizec and Equity Office Properties. The private equity firm, which is in the process of incorporating its entire office portfolio into one platform, has already sold more than $20 billion of assets from the Equity Office portfolio. The properties sold to Arden are all in markets where Blackstone has previously sold Equity Office assets.
At the time of the Blackstone acquisition, CarrAmerica had properties in 12 markets throughout the country, but its largest market was Northern California, where it owned or managed more than five million square feet of office space. Blackstone will continue to own the company’s significant holdings in the Silicon Valley market, where rents are expected to increase on the back of the region’s economic recovery.
The CarrAmerica deal represents Arden Realty’s largest transaction since the company was acquired by GE Real Estate in May 2006. Over the past 12 months, the company has acquired approximately $800 million of new properties and, with the recent deal announcement, is looking to expand its presence on the West Coast.
“This acquisition accelerates our growth objectives for the year,” Arden president and chief executive officer Joaquin de Monet said in a statement. “It also reflects two components of our strategy: our strong commitment to our core markets and the blueprint for our new target markets.”