Blackstone Group LP reportedly agreed to sell two Boston office buildings to Oxford Properties Group and a unit of JPMorgan Chase & Co. for around $1.3 billion.
Sources with knowledge of the real estate transaction told Bloomberg that Blackstone's office building sale is scheduled to be completed by September. The two office buildings are located at 500 Boylston Street and 222 Berkeley Street at Boston's Back Bay district. The Boylston tower has 758,320 square feet of office space, while the other property has 553,321 square feet. The sale reportedly attracted several investors including real estate investment trusts and sovereign wealth funds. Representatives from New York based Blackstone, JP Morgan and Oxford declined to comment on the office real estate transaction.
The Bloomberg report also mentioned the New York firm trying to sell its office assets in order to take advantage of the rising demand of prime real estate in major coastal markets. Last year, Oxford led a group to purchase five office buildings in the Boston area from Blackstone's portfolio for $2.1 billion. Blackstone reportedly is still planning to divest other real estate assets from the Equity Office portfolio, which they acquired in 2007. Prior the acquisition, Equity Office owned stakes in 543 buildings with a total space of 103.1 million square feet.
According to Larry DiCara, veteran real estate lawyer at Nixon Peabody International LLP, previous office building turnovers were not sold for such a high price, reports Boston Globe. DiCara added, "It shows how strong the market is. This is more comparable to a Midtown New York City building than a Boston building, in terms of the price point."
DiCara also mentioned that the two office buildings are located at a great site, given the nearby transit access and various retails shops. He described the two towers as "top notch buildings" and how the property "never had a bad year" since it opened. DiCara also said that "there's always going to be value" in the area given its prime location.