You never really know what real estate is worth until you sell it. To get top dollar, the best-case scenario is to have at least two potential buyers with deep pockets compete in a bidding war over the property.
That is what happened this week for Equity Office Properties Trust (EOP Quote), the largest publicly traded office-property real estate investment trust, or REIT.
The Blackstone Group won the bidding war against Vornado Realty Trust (VNO Quote), valuing Equity Office Properties at $39 billion. From EOP's perspective, the company is getting full value of its real estate holdings for its shareholders, while Blackstone sees a higher potential value. When real estate investors compared the valuation placed on EOP with other REITs, the entire sector looked undervalued and the rally gained traction. ...
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