Blackstone among bidders for $800 million Paris office property, sources say

Blackstone is among the shortlisted bidders for the CityQuartier Trocadéro, a Paris office property valued at approximately €700 million ($800 million), being sold by Union Investment. The sale of the prime location building, which also contains luxury apartments, would be one of Europe's largest post-pandemic office deals as investors show renewed interest in trophy assets despite overall subdued office transaction levels since 2009. Bids have been submitted, with some below the asking price, and the process remains ongoing with no guarantee of a deal.

Analysis

The potential sale of the CityQuartier Trocadéro building in Paris for approximately €700 million ($800 million) signals notable investor interest in prime European office assets, despite a generally subdued market. Blackstone (BX) and Hines are among the shortlisted bidders for this century-old, 444,000 square feet property, which also includes 57 luxury apartments and boasts 98% office occupancy with tenants like Swatch Group and Lindt & Sprüngli. The seller, Union Investment, has reportedly excluded offers below €650 million, indicating a firm valuation floor, although some bids have come in under the initial asking price. This transaction, if completed, would be one of Europe's largest post-pandemic office deals, underscoring a flight to quality where 'trophy assets' in desirable locations are attracting capital. This interest contrasts with overall European office sales, which MSCI data indicates slumped to their lowest level since 2009 last year and have remained subdued. The unsuccessful bid from Commerz Real, owned by Commerzbank (CBKG.DE), further highlights the competitive nature of acquiring such premium assets. The process remains ongoing, and a finalized deal is not guaranteed, reflecting a mixed sentiment with a moderate market impact.

Key Decisions for Investors

• Investors should monitor the final sale price of the CityQuartier Trocadéro as a benchmark for prime European office valuations and a gauge of institutional appetite for trophy assets.
• Consider this transaction as evidence of a bifurcated office market; while prime assets in core locations attract strong interest, the broader office sector may still face headwinds.
• For investors in Blackstone (BX), a successful acquisition would add a significant, high-quality European real estate asset to its portfolio, potentially bolstering its alternative asset management platform.