Walton Street, whose managing principal is billionaire Neil Bluhm, bought the properties for $2.9 billion at the peak of the real estate market in 2007, Crain’s reported today. About $2.5 billion of loans on the Chicago-based firm’s portfolio come due June 8, and the properties are worth so much less than the debt that it makes sense to walk away, the newspaper said.Here is another Bloomberg article on the transaction, as it looks like Blackstone is going to get the portfolio.
Blackstone Group LP (BX), the world’s largest private-equity firm, has acquired almost $600 million of debt on the buildings, putting it in a position to take control if the borrower defaults.
I like this quote that ends the first Bloomberg article:
The (Walton Street property) surrender comes just Walton Street is trying to raise $2 billion for its seventh and largest fund, Crain’s reported.It's a Wizard of Oz approach to raising capital, "Pay no attention to all the lost properties behind the curtain." Mr. Bluhm didn't become a billionaire for lack of chutzpah.