GE close to selling nearly all its $30 bn real estate holdings

General Electric (GE) is close to clinching a deal to sell nearly all of its $30 billion real estate portfolio to a consortium led by Blackstone Group and Wells Fargo & Co, The Wall Street Journal yesterday reported, citing people familiar with the matter.

 
The GE Building in the Rockefeller Center, New York City  

The move comes four months after Blackstone agreed to buy GE's property unit in Japan for around $1.6 billion.

GE was in talks with the consortium to sell $26 billion worth its $30 billion real estate portfolio, which includes investments in office buildings, shopping malls and other commercial property spread around the world, the report said.

A deal, which could be announced as early as today, would be one of the largest property deals on record.

It would also be the biggest commercial real estate transaction for Blackstone after it acquired Equity Office Properties Trust in 2007 for $39 billion.

GE, under CEO, Jeff Immelt, has come under investor pressure to focus on its core business of being an industrial company. The company's stock price has stagnated below $30 since the 2008 global recession.

GE, whose business ranges from aircraft leasing to energy, is open to hiving off its commercial lending business at a right price.

GE had invested billions of dollars into property to reap fast profits, but since the 2008 global financial crisis, the property market is no longer lucrative, especially in the US, where a bulk of its property assets are held.

About $9 billion of GE's portfolio is held as ownership stakes that GE Capital has taken in properties, while around $20 billion is in investments in debt issued by property owners, according to the report.