Where was I when real estate became a commodities business controlled by traders? The sale of Equity Office, the biggest real estate deal in the history of dirt is being fought over by a world class REIT and a hedge fund. While I would expect the REIT to hold the assets, the hedge fund strategy (if you want to call it that) will be to dismantle the operating company and sell off assets as quickly as possible. In fact, I am sure there will be agreements to sell some of the assets the day after or simultaneous with the closing. I heard that during due diligence questions were asked about work orders. I mean the hedge fund wanted to know why as the property manager of a building you would agree to change a tenant’s light bulb. It’s called a lease stupid! It seems like no one is in the real estate business anymore. When I was a young pup you buy or build a building and you would, oh I don’t know, own it and manage it. You knew your tenants and they knew you. Then again, I would have settled for the Equity Office break up fee, but that’s a subject for another day. Any thoughts?
