Vornado Realty ( VNO) is teaming up with two partners with an offer to buy fellow office REIT Equity Office Properties ( EOP) for $52 a share.

The move sets the stage for a potential bidding war with the Blackstone Group, which has already agreed to buy Equity Office for $48.50 a share. Including debt, that deal was valued at $36 billion -- the most expensive real estate transaction ever.

Vornado is joining with real estate investment firms Starwood Capital and Walton Street on its bid, which consists of 60% cash and 40% Vornado stock.

At closing, Vornado would buy and retain about half of Equity Office's assets, including new footholds in Boston, San Francisco and Los Angeles, the company said Wednesday. Vornado would also get some unspecified New York City and Washington D.C. properties.

Vornado expects the deal to be accretive to funds from operations.

One of the ways that Vornado can top Blackstone is on the debt side, says a buy-side source who owns Vornado. As a public company with investment grade ratings, Vornado's cost of capital is much lower than Blackstone's.

Equity Office shareholders are schedule to vote on the Blackstone buyout on Feb. 5. Under its deal terms, Blackstone has matching rights on any rival bid and would receive a $200 million breakup fee.

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