Blackstone to forfeit US$20m deposit on scrapped office deal: sources

Blackstone Group is abandoning plans to buy an office building in Oakland, California, that's leased to payments company Square Inc, according to people familiar with the matter.[WASHINGTON] Blackstone Group is abandoning plans to buy an office building in Oakland, California, that's leased to payments company Square Inc, according to people familiar with the matter.

The private-equity giant will forfeit a US$20 million deposit it made to purchase the 397,000 square foot building, known as Uptown Station, said the people, who asked not to be identified discussing the private negotiations. Commercial real estate investors are re-evaluating plans with huge swaths of the US locked down to slow the spread of the coronavirus. Blackstone's deal to buy Uptown Station from CIM Group for about US$400 million was seen just weeks ago as a symbol of Oakland's draw for property owners who wanted to bet on the technology industry's expansion outside of San Francisco.

Blackstone had planned to purchase the building through its non-traded real estate investment trust, BReit. The firm decided to walk away after recent changes in the lending market, one of the people said. Blackstone is still actively pursuing real estate acquisitions, sales and financings, according to the person.

A spokesman for CIM didn't immediately respond to a request for comment. Institutional Real Estate previously reported that the deal had fallen apart.

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