Equity Office Properties bought by Blackstone Group for $36 billion
Equity Office Properties Trust of Chicago, the nation’s largest office building owner-manager, and Boston’s largest as well, is being acquired by a global private investment firm, The Blackstone Group of New York, for about $36 billion, according to the companies.
Equity Office -- which owns about 12 million square feet of property the Boston area including trophy buildings like Rowes Wharf, Center Plaza, 60 State Street, 225 Franklin St., and 125 Summer St. – owns or has shares in a total of more than 100 million square feet in more than 500 buildings 16 states and Washington, D.C.
“It’s a great idea, good for both groups,” said Rob Griffin, president of Cushman & Wakefield of Massachusetts Inc. “The properties individually, if you broke them up and sold them, they’d be worth a lot more than their acquisition price.
The companies said yesterday they had signed an agreement that Equity Office, which is traded on the New York Stock Exchange, would be acquired by Blackstone Real Estate Partners, a Blackstone Group affiliate, early next year.
“Our ultimate goal has always been to maximize shareholder value, and we believe we have done that through this transaction,” Richard Kincaid, chief executive of Equity Office, said in a press release.
Equity Office acquired most of its Boston property in 1997 when it paid $3.9 billion to purchase local Beacon Properties Corp., developer of Rowes Wharf, including the Boston Harbor Hotel, and other distinctive Boston buildings.
With a partner, the company owns 75-101 Federal St., which has been on the market recently.
Equity office said the purchase price of $48.50 per share in cash is an 8.5 percent premium over the company’s closing share price last Friday, and a 20.5 premium over the stock’s three-month average.
In Boston, Equity Office has a long lease with the Massachusetts Bay Transportation Authority to operate South Station, and it is currently about to start construction on redevelopment of historic Russia Wharf, between the Rose Fitzgerald Kennedy Greenway and the Fort Point Channel, into a mixed-use complex with a 31-story office tower and luxury residences.
Earlier this year Equity Office restructured, eliminating a top level of management. Maryann Gilligan Suydam, who had been senior vice president of the Boston Region and was formerly with Beacon Properties, left the company.
Blackstone Real Estate was formed in 1992 and has more than 2,400 properties with a value of at least $43 billion, according to its website.
(By Thomas C. Palmer, Jr., Globe staff)
