The answer to the age-old question is “Would you rather be lucky or kind?”, and at least in Blackstone’s case, it’s a bit of both.

Blackstone, once an office giant, has trimmed its real estate portfolio from a high of 60% to 2%.

However, this transformation did not happen overnight.

In 2007, Blackstone bought Sumzel’s office portfolio for $39 billion, $3 billion more than it wanted to pay. But another office giant, Vornado, jacked up the price by bidding. As a result, Blackstone sold some buildings to cover the extra costs.

Whether this is luck or genius is debatable.

In other commercial real estate news last week, the iconic Flatiron Building is being considered for a residential conversion.

A team led by Jeff Gural’s GFP Real Estate won the building at auction with a $161 million bid. Owners are now figuring out what to do with it, although at least some will be moving residential.

“While we have not made a final decision, it is likely that we will convert at least half of the building into homes,” Gural said in a statement. “Our discussions are ongoing, but nothing is out of the question.”

However, because it has been vacant for the past four years, the Flatiron is in the perfect position to undergo an overhaul. The building occupies approximately 8,000 square feet and has a gross leasable area of ​​180,000 square feet, making it ideal for a luxury condominium.

Texas, too, is changing. Texas-based Silver Star Properties announced a major shift in its investment strategy, repositioning its 6.8 million square foot portfolio of office, retail and industrial properties as self-storage.

The Houston-based real estate investment trust completed a $3 million acquisition of Southern Star Self-Storage Investment Company in early May to operate alongside its existing business.

“The negative impact of tightening credit markets could have a material adverse effect on us due to, but not limited to, the inability to finance the acquisition of real estate assets on favorable terms, if any, increased financing costs or financing with increasingly stringent covenants, ’ the company said in a filing with the Securities and Exchange Commission.

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