Morgan Stanley Buying 10 SF Properties for $2.5B

SAN FRNCISCO-Morgan Stanley is acquiring 10 downtown office properties here from Blackstone Group LP for $2.5 billion, according to local industry sources and published reports. The deal includes approximately 4.14 million sf in nine existing buildings one under construction, Foundry Square I, a $145-million redevelopment that when complete will be the new headquarters of Barclays Global Investors.The buildings came with Blackstone’s $39-billion acquisition of Equity office Properties Trust, which closed last month. The company borrowed nearly $32 billion for the deal, including a $3.5-billion bridge loan necessary to outbid Vornado Realty Trust. Since that time, Blackstone has sold or agreed to sell for some $21 billion approximately 112 of the 500 buildings that it acquired in the deal.The existing properties involved in the sale to Morgan Stanley are One Market, One Post Street, One Maritime Plaza, 201 Mission, 60 Spear, 188 Embarcadero (Bayside Plaza), and 150, 201 and 580 California St. The only downtown EOP building not in the deal is the Ferry Building, for which a $100-million rehab was completed in 2003. EOP’s entire Bay Area portfolio totals approximately 14.5 million sf.