NEW YORK CITY-Blackstone Real Estate Advisors, the real estate investment and management arm of the Blackstone Group, an investment bank, has bought the participating mortgage secured by 7 World Trade Center from Teachers Insurance and Annuity Association. The 47-story, class A, Downtown Manhattan property is controlled by Silverstein Properties, Inc. Terms were not disclosed

The building’s two million sf of office space are renting, for, on average, $45 per sf. Robert Goodman, senior managing director of Julien J. Studley Inc., estimates that is 10% or more below market level. The property is completely occupied at the moment with tenants such as Salomon Smith Barney, Hartford Fire Insurance, American Express, the General Services Administration and the US Securities and Exchange Commission. But space may open up, according to Goodman. In the next year or two Hartford Fire and Insurance, which has two floors, may move, and the GSA may move out of its floor

Blackstone managing director Steve Galiotos notes that it entered into the deal because, “Rising rental rates, coupled with the lack of available office space in Downtown Manhattan, made 7 World Trade Center an attractive investment opportunity.” Goodman agrees, noting that, “it is a wise investment in this marketplace because of the lack of large floorplates that this property has. It will merit a premium even if the general economy hits a downturn.”

Silverstein has developed more than 20 million sf of office, residential and retail space. Most of the office space is in the Financial District and along Fifth Avenue in Midtown.

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