ING is looking to sell its $92.4 billion global real estate business and BlackRock Inc. has emerged as one of the potential buyers, according to industry sources
ING Groep NV is looking to sell its $92.4 billion global real estate business, ING Real Estate Investment Management, and BlackRock Inc. has emerged as one of the potential buyers, according to industry sources familiar with the potential deal.
ING Real Estate comprises several key units, including ING Clarion Partners LLC, a U.S. private-equity real estate investment manager; ING Real Estate Select, a global real estate multimanager business; ING Clarion Capital, a global real estate debt securities business; and ING Clarion Real Estate Securities, a global public-equity business.
Last October, ING, under pressure to repay a bailout by the Dutch government, announced that it was splitting up its banking and insurance operations. As part of that announcement, the firm said it was looking at initial public offerings and divestitures as options.
The sale of its global real estate business is part of the divestiture plan, people familiar with the situation said.
“It's easier for ING to carve out the real estate investment division, because it's not as integrated into the rest of the business as ING's other divisions,” said one investment banker familiar with the possible deal, who asked not to be identified.
Anneke van der Galien, a spokeswoman for ING, declined to comment.
Buying ING's global real estate business would make sense for BlackRock, sources noted, given the hit the firm took in its real estate investing unit over the past year. BlackRock Realty, the real estate arm of BlackRock, teamed up with Tishman Speyer in 2006 to buy the Peter Cooper Village-Stuyvesant Town development in New York from MetLife Inc. for $5.4 billion.
After the real estate bubble burst, the site lost an estimated $3 billion in value. In January, Tishman Speyer and BlackRock turned the property over to creditors. BlackRock took a loss of $120 million on the investment.
Melissa Garville, a spokeswoman for BlackRock, declined to comment.
The Goldman Sachs Group Inc. is the investment banker representing ING in the sale, according to one source familiar with the discussions, who asked not to be identified. Andrea Rachman, a Goldman spokeswoman, declined to comment.
BlackRock may be looking to take advantage of consolidation in the real estate investing world, said Kyle O'Connor, a principal at Marcus Partners Inc., which invests in private real estate.
“I think there is a high probability that we are going to see a reduction in the ranks of the number of real estate investment managers out there,” said Mr. O'Connor, who had not heard the rumors about ING's sale.
Just last month, Citigroup Inc. announced that it was selling its real estate division, Citi Property Investors, to Apollo Management LP.
“The real estate boom period produced a number of real estate investment managers,” Mr. O'Connor said. “A lot of them are owned by large international companies that want to get out of the business.”
