After the Wall Street meltdown, U.S. regulators slappedrules on banks and other financial institutions aimed at curbingtheir risk taking. These requirements, including more burdensomecapital requirements and the hiring of additional compliancestaff, have raised the costs of real estate investing, drivingsome out of the business and prompting others to cut back.
As part of a wider restructuring, GE announced on Friday itwould sell most of the assets of its GE Capital Real Estate unitto Blackstone and Wells Fargo & Co for about $23billion.
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"The distance between Blackstone and everyone else is likethe Grand Canyon," said an investment banker who has advised thecompany.
The deal values the assets at book value, with a built-inmechanism to mitigate Blackstone's risk for buying them withlimited due diligence, one of the people added. It wouldotherwise have taken months to assess each property. It isunclear what that mechanism entails.
Blackstone is acquiring roughly 24 million square feet ofoffice properties in the U.S. and 18 million square feet ofoffice, logistics and shopping malls in Europe. It also agreedto purchase loans in the United States, Mexico and Australia.
From single-family homes in the United States to distressedcommercial property in Europe, real estate has overtaken privateequity http://www.scottish-meat-wholesalers.org.uk/property-specialist-dean-graziosi-information-on-how-he-may-help-you/
