The number of mega-deals in the LBO sector has risen markedly this year thanks to unprecedented levels of capital and favorable financing markets. In October, blockbuster deals for trophy pieces of real estate made their mark in the private equity real estate sector as well.
New York-based Broadway Real Estate Partners has acquired a ten-building portfolio of office buildings in major cities across the US for $3.4 billion (€2.7 billion), according to reports. The portfolio, which was sold by Boston-based Beacon Capital Partners, includes Boston's John Hancock Tower.
The deal apparently marks the “largest private-to-private transaction we have tracked,” says Dan Fasulo, the director of research for New York-based research firm Real Capital Analytics.
In another blockbuster deal the same week, a joint venture between New York developer and real estate investor Tishman Speyer and BlackRock Realty acquired New York City's largest apartment complex for a whopping $5.4 billion from publicly traded life insurer MetLife, which says it will earn $3 billion on the deal. For the price, the joint venture gains 110 buildings with more than 11,000 apartments on nine city blocks on Manhattan's East Side.
While Tishman Speyer and BlackRock scaled new heights by acquiring a trophy residential site that covers a large swath of Manhattan's valuable real estate, the transaction between Broadway and Beacon did the same in the office sector. That portfolio also includes three other buildings in Boston, four in Los Angeles, two properties in Washington DC and the Bank One Tower in Denver.
As of June, Broadway Partners had acquired 8.5 million square feet of office space valued at $2.7 billion since 2000. The firm, which was founded by former Fortress pro Scott Lawlor in 1999, is expected to close its second fund soon on approximately $600 million.
Beacon's fourth vehicle, which raised $2 billion, primarily targets value-added opportunities in Boston, Washington DC, New York, Los Angeles, San Francisco, Denver, Seattle, Chicago, London and Paris. As of June, the fund had committed more than three-fourths of its equity, having acquired or committed to acquire 12.6 million square feet of office space.