Macklowe Takes 8 Former EOP Assets in Manhattan

Macklowe Properties is walking away with all but one of Equity Office Properties Trust's Manhattan holdings, a portfolio of Class A Midtown buildings totaling about 6.6 million square feet for about $7 billion.

In the first of several expected asset sales to begin the process of dismantling EOP's former portfolio, The Blackstone Group flipped the well-leased properties to Macklowe following its $39 billion take-private deal, which closed at lightning speed today.

Meanwhile, markets from Washington DC to Seattle and San Francisco are buzzing that Blackstone will flip other large chunks of the newly acquired portfolio in pending deals of the same magnitude. Eastdil Secured is believed to be advising Blackstone on the property sales.

Macklowe will be taking all of Equity Office's former holdings, except for the 1.4 million-square-foot building at 1095 Sixth Ave. The thinking is that Blackstone opted to hold onto that asset while the gut-renovation is completed. Blackstone will likely shop it when it is stabilized.

Deutsche Bank is providing the financing backing for Macklowe's acquisition -- up to $6 billion, according to published reports.

The new additions to Macklowe's Manhattan holdings are:

Park Avenue Tower, a 568,060-square-foot building at 65 E 55th St. between Park and Madison avenues;
1301 Avenue of the Americas, a 1.76 million-square-foot tower between 52nd and 53rd streets also known as the Credit Lyonnais Building;
1540 Broadway, a 1.2 million-square-foot tower between 45th and 46th Streets. Equity Office paid $560 million to acquire the office portion of the building last year while the retail went to Vornado Realty Trust (NYSE: VNO) in a $260 million deal;
527 Madison Ave., a 215,332-square-foot building at TK. Equity Office acquired it in 1997 for $67 million or $311.15 per square foot;
717 Fifth Ave., a 464,796-square-foot building at 56th St. that was acquired in 2004 for $160.5 million or $345.31 per square foot;
850 Third Ave., a 568,867-square-foot building at 52nd St. that Equity Office acquired for a paltry $68.1 million or $119.71 per square foot in 1995;
Tower 56, a 163,830-square-foot building at 126 E 56th St. between Park and Lexington avenues. Equity Office acquired the building when it bought Cornerstone Properties in 2000 and
Worldwide Plaza, a 1.7 million-square-foot tower at 825 Eighth Ave. between 49th and 50th streets. Equity Office paid $313.24 per square foot or $578 million to buy the building from BRE/Worldwide in 1998, according to CoStar Group information.

The additions further solidify Macklowe's posiiton as a top Manhattan player with a portfolio that already included such property gems as the General Motors Building at 767 Fifth Ave. and 400 and 540 Madison Avenue.

Most recently, the company led by real estate mogul Harry Macklowe made headlines when it walked away from a $4.6 billion bid to buy Reckson Associates Realty Corp. in a venture with Mack-Cali Realty Corp. (NYSE: CLI) and Carl Icahn.