Blackstone Group LP is at it again. Last November I wrote about Blackstone’s efforts to acquire a large portfolio of distressed commercial property held by Morgan Stanley. It is now being reported in the Wall Street Journal that Blackstone Group LP is acquiring some of Merrill Lynch’s remaining real estate. The assets are made up of both equity and debt interests in properties around the globe that were part of Merrill Lynch’s assets when Bank of America Corp acquired the investment bank in 2008.
Some of the properties to be acquired by Blackstone include interests in a Marriott in Prague, residential buildings in Sao Paulo, the Waldorf-Astoria in Orlando, Florida, and the Ko Galerie retail project in Dusseldorf, Germany, according to a person familiar with the matter. Some of the debt interests to be acquired include a portfolio of nonperforming loans in Italy and more than $100 million of convertible debt on Merrill’s onetime offices at Two World Financial Center in Manhattan.
This is not the first deal between Bank of America and Blackstone. BoA has been selling some of its holdings in efforts to trim down, and Blackstone is eager to pick up these properties. In 2010, Blackstone agreed to manage on behalf of Bank of America more than $2 billion of former Merrill real estate assets in Asia. For cash-rich Blackstone, these kinds of deals have great investment potential, and we should expect to see more of them in 2012.