GE makes $2.2b real estate buy

General Electric Co., with businesses from lighting to jet engines, agreed to buy 147 properties across the United States from a fund run by the Trammell Crow family's investment firm for $2.2 billion.

The acquisition includes 19 shopping centers, which GE will sell to Kimco Realty Corp. for about $920 million, according to a statement yesterday from Crow Holdings of Dallas.

GE, the world's largest publicly traded real-estate investor, is shifting to owning and operating property instead of financing because profits are higher. The value of commercial real estate may keep rising worldwide, making it a ``very robust business," GE real estate chief Michael Pralle said in a Sept. 11 interview.

``GE sees opportunities in the commercial real estate market," said Nigel Coe, a New York-based analyst with Deutsche Bank who rates the shares ``buy" and doesn't own any. ``While the residential market is experiencing downward pressure, commercial property is doing very well."

The company is betting rents will climb as space becomes more scarce, Coe said. Office vacancy rates are likely to decline to an average of 13 percent from 13.6 percent a year earlier, the lowest since 2001, the National Association of Realtors said this month.

Shares of GE fell 10 cents to $35.34 at 4 p.m. yesterday in New York Stock Exchange composite trading.

Apart from the shopping malls, GE will buy 112 industrial buildings, eight apartment buildings, six hotels, and two office properties from Crow Holdings' third real-estate fund. The transaction will be completed by the end of the year, Crow said.