The Blackstone Groups acquisition of Equity Office Properties Trust closed without issue and the property management firm is now in the process of flipping the  properties to reduce the debt the 39 billion dollar deal created. The  red hot commercial market is only happy to comply and over 18.5 billion dollars in properties have been sold so far with more on the way.

The New York private-equity firm has raised $18.5 billion in asset sales, including eight buildings that were sold in New York for $7 billion to Macklowe Properties simultaneously with the merger closing Feb 9.  Blackstone has also sold or agreed to sell Equity Office properties in Los Angeles and Orange County, Calif.; Portland, Ore.; San Diego; Seattle; and Washington. Competition is expected to be fierce for the buildings in Boston and Austin, Texas, as well as Chicago.

Blackstone bought Equity Office, previously the nation’s largest office landlord, for $39 billion, including debt, in the second-largest leveraged buyout in U.S. history. The transaction put an exclamation point on the continued demand for office real estate among private investors based on the belief that there is room for improvement in the office market.

This week, Blackstone is expected to announce another $3.5 billion in sales, according to one person familiar with the matter. Such swift sales are a reflection of Blackstone’s determination to reduce the debt load on its prize as quickly as possible, especially given the relatively low yields on many properties. Blackstone’s strategy is to sell a cross section of its new portfolio, which includes the highest-quality properties as well as those that are less desirable.via the RealEstateJournal

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