Better than Liar’s Poker: Playing ‘Monopoly' With Real Money

Don’t knock it ‘til you try it! While "Monopoly" has always been popular, it is only a game. More interesting than the legendary game where players buy and sell properties and collect $200 for passing "Go" is the reallife real estate game that financial institutions, real estate investment trusts, and financial service companies are playing these days.

One active player is Boston Properties, a REIT that is one of the largest owners of Class A office buildings in Manhattan, including 599 Lexington Ave., 399 Park Ave., Times Square Tower, and Five Times Square. Earlier this year, Boston Properties purchased from a partner, Allied Partners, its interest in the Citigroup tower on Third Avenue. It also sold its 2.8 million-square-foot office complex at 280 Park Ave. to a foreign investor for $2.8 billion, or about $1,007 a square foot.

Reckson Associates Realty Corp. is another public REIT that has a significant presence in all of the key markets in the tri-state area — New York City, Westchester, Long Island, and parts of Connecticut and New Jersey.

The company owns 919 Third Ave., 1185 Avenue of the Americas, 810 Seventh Ave., 1350 Avenue of the Americas, 120 W. 45th St., and One Court Square in Long Island City.

The REIT announced last week that it was interested in selling itself and hired Goldman Sachs as an advisor.According to a report in Real Estate Finance & Investment, the Blackstone Group is interested in acquiring Reckson.

"Since the public REIT market does not value shares based upon a roll-up of underlying asset values, the market values of public REITs do not always estimate a REIT's underlying asset value accurately," the managing director at Alvarez & Marsal, Gerald Pietroforte, said. "As a result, some public REITs such as Arden Realty and CarrAmerica have recently sold at significant premiums to their market values based upon strong underlying asset values. Other public REITs such as Reckson may have reason to believe that their underlying asset values support a significant premium, and therefore are willing to test that belief through a corporate sale."

http://www.nysun.com/article/37268