Blackstone Group and Park Tower Realty join forces for Times Sq. developments.

The Blackstone Group, a leading New York-based private investment bank, and Park Tower Realty, a developer and manager of quality properties, have announced the formation of a joint venture to exclusively pursue the acquisition and development of one or more of the remaining office development sites in Times Square.

In addition, Park Tower and Blackstone are looking, on a non-exclusive basis, at a number of additional development opportunities.

Blackstone recently closed its new $1.1 billion real estate private equity fund, Blackstone Real Estate Partners II, and has become well known for its acquisition of important office buildings, including Worldwide Plaza in New York City.

"We were early investors in the recovery of Central Business District office buildings across the country," said John Z. Kukral, senior managing director of The Blackstone Group. "As the office market recovery has gained momentum, we have continued to seek investments ahead of the curve by buying key development sites in major markets. We believe in the promise of Times Square and the West Side office market in New York City. With our financial resources and Park Tower Realty's unparalleled expertise and experience, we should be able to create significant value through investing in large-scale development projects."

Park Tower Chairman and Chief Executive George Klein added, "As pioneers who have been working on Times Square for more than 10 years, it gives us great pleasure to team up with Blackstone to pursue the remaining sites for development. We're thrilled to share these opportunities with a partner as prestigious as The Blackstone Group and look forward to pursuing a broader relationship down the road."

Over the past 25 years, Park Tower Realty has developed more than 12 million square feet valued at over $2.5 billion. Its partners have included IBM, Mitsubishi Estates, Prudential and Bechtel, and its clients have included JP Morgan, Sumitomo Life, Chase Manhattan Bank, SBC Warburg Dillon Read Inc. and the U.S. Government. Park Tower has intimate knowledge of Times Square development, Klein said, having been designated the original developer of the office buildings in 1992 by The Times Square Redevelopment Project, the state- and city-sponsored 13-acre urban renewal program.

The Blackstone Group was founded in 1985 by its current chairman, Peter G. Peterson, and its current president and CEO, Stephen A. Schwarzman. Real estate is one of five business areas at The Blackstone Group. The firm is also the sponsor of the largest corporate private equity fund raised in 1997, with approximately $4 billion of available equity capital. Blackstone is also a leader in cross-border mergers & acquisitions; restructuring and reorganization; and Liquid Alternative Asset Management.

Among the assets in Blackstone's current $4 billion real estate portfolio are buildings representing over 10 million square feet of office space in the United States and Europe, with major holdings in Chicago, Dallas, Los Angeles, New York, Philadelphia, San Francisco, London, and Paris. Blackstone has also acquired luxury and upscale hotels such as Four Seasons and Hyatt, with an aggregate total of more than 5,500 rooms. Earlier this year, Blackstone acquired the four Swissotels in the United States (including the Drake in New York). Blackstone also holds significant stock interests in Interstate Hotels Corporation, the largest independent hotel management company in the U.S., and Cadillac Fairview, the largest property company in Canada.