NEW YORK CITY-Not much grass is growing under the feet of the locally based Blackstone Group. The private investor has just entered into an agreement with Washington, DC-based CarrAmerica to purchase all of that developer/owner’s outstanding common stock. At $44.75 per share, the all-cash deal totals out to $5.6 billion.

In a statement released this morning, CarrAmerica executives reveal that the price tag “represents an 18.4% premium over CarrAmerica’sclosing stock price on Feb. 16, 2006.” Stockholders of both firms have yet to give their blessing to the deal. A special meeting is expected but has not yet been scheduled. The deal, however, is expected to close in Q2.

Plans at this point call for the liquidation of the company, but sources familiar with the deal say that the liquidation would not impact the brand or the platform. No further details on what exactly that means were forthcoming.

According to the statement, “Each holder of a share of the 7.50% Series E Cumulative Redeemable Preferred Stock will receive $25 per share in cash plus any then accrued but unpaid dividends. The common limited partnership interests in two of CarrAmerica’s operating partnerships will be acquired for $44.75 per unit in cash. Qualified holders of common limited partnership interests will be given the option (in lieu of cash) to elect to receive preferred units of limited partnership interest in the partnerships following the merger.”

“With our most aggressive performance assumptions, we don’t believe we could match the value being offered to our shareholders today by this offer,” says Thomas A. Carr, CarrAmerica chairman and CEO. “This transaction will allow us to fulfill our mission with our stockholders and create opportunities for growth.”

Among CarrAmerica’s major shareholders is Cranford, NJ-based Mack-Cali Realty Corp., which recently made an investment in CarrAmerica. Mack’s holdings in the newly sold DC firm total more than 1.8 million shares of common stock.

The newly minted deal continues a hot acquisition streak for Blackstone, which only last week closed on its $367-million purchase of Meristar Hospitality’s hotel portfolio. In this latest coup, Goldman, Sachs & Co. served as CarrAmerica’s financial advisor. Citigroup, Bank of America and Deutsche Bank served in the same capacity to Blackstone. Deutsche Bank, Bank of America and Citigroup are funding the deal. Hogan & Hartson LLP acted as legaladvisor to CarrAmerica. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone.

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