Investment Committee · 001
Would you buy $39 billion of offices to sell the pieces?
It is February 2007. Credit is abundant, office values are elevated, and you are competing to buy the largest U.S. office landlord near the top of the cycle.
No hindsight before the vote.
The deal card
What was knowable at the time
- Target
- Equity Office Properties Trust, led by Sam Zell
- Price
- $55.50 per share in cash
- Transaction value
- Approximately $39 billion
- Your fund equity
- Approximately $3.5 billion reported
- Competing bid
- Vornado: roughly 60% cash and 40% stock
- Breakup protection
- Approximately $720 million
Inside the room
The acquisition only works if the resale plan works.
- 01
The portfolio contains more than 500 office buildings across multiple markets.
- 02
You believe selected buildings and regional packages can be sold rapidly to other buyers.
- 03
The acquisition and the disposition plan must be underwritten at the same time.
- 04
If the resale window closes, you may be left holding a highly leveraged office portfolio at peak pricing.
Source room
Primary records · Quietly cited
NPV reconstructs the decision using contemporary public records. Enterprise value, equity invested, debt, disposition proceeds, and profit are not interchangeable.