According to The Wall Street Journal, New York real estate mogul Harry Macklowe's real estate empire is in serious trouble. After purchasing seven New York buildings from Equity Office Properties Trust for $6.8 billion, Macklowe's company, Macklowe Properties, has $5.1 billion in debt that must be paid off by February.

The state of the credit markets is making refinancing very difficult, and because of the tiny down payment ($50 million), the properties are not generating positive cash flow.

Macklowe's people are, of course, expressing confidence, and many observers believe that Macklowe will pull through. But maybe Macklowe has nothing to worry about, even if it does end badly. After all, wiped out real estate moguls don't disappear, they just ...

Get their own reality shows, have epic feuds with Rose O'Donnell, sell real estate seminars through late-night infomercials, and have their own brands of water.

In early February, The Blackstone Group announced that it had won the bidding for Equity Office Properties Trust in a record-breaking transaction worth $36 billion.

At that time, many commentators gave the deal a big thumbs up, anticipating that it would mark the start of another move higher in the long-running boom in listed property shares, dominated by Real Estate Investment Trusts, or REITs.

Others took note of the fact that the chairman and largest shareholder of EOP was Sam Zell. He is a well-known "vulture investor" with a longstanding reputation for buying cheap and selling dear, who stood to receive more than $90 million for his 1.9 million share stake.

While it may be too soon to say for sure, the relative performance of other shares in the sector after the deal was agreed upon suggests the cynics may have been right. Since February 7, the date Blackstone confirmed it had "won," the Dow Jones U.S. Real Estate Index has underperformed the S&P 500 Index by more than 10.5%.

With all the excitement about mega billion-dollar deals, a torrent of mergers and acquisitions activity, and the rocket-like trajectory of the private equity boom, it makes you wonder about who the real "smart money" is nowadays.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

Before the dust has settled on the recent acquisition of Equity Office Property Trust, the Blackstone Group follows with an IPO that is projected to raise exactly the same amount of money that they contributed to the buyout, $4 billion - the rest is someone elses money or leverage. Coming out with this IPO after the Blackstone CEO recently called public markets overrated (as posted recently by Amey Stone) is ironic indeed.

Why have an IPO when you have not had a problem raising money in the past, and subject yourself to the requirements of a public company when you are already on record as finding this a nuisance at best? Could it be that you are thinking the public market is ripe for the picking? Is it possible given your disdain that you believe the public offering will raise more money than a private offering? Perhaps you believe selling 10% of the company to the public who's voice is diluted is preferable to a single entity holding 10% of the company and having a big say? Probably all of the above and millions in fees to go around as well. How much of the IPO is already spoken for with friends and family that were able to buy discounted shares?

So what's wrong with this IPO, absolutely nothing at all - just stop pretending, stop whining, and get on with it. If I over paid Sam Zell by so much I would start laying off the risk too. Both sides knew exactly what they were getting into. I hope buyers of the Blackstone shares do as well. A word of caution from the left coast. Out here another very shrewd commercial real estate tycoon sold off his real estate company. It was not long ago that Richard Ziman sold Arden Realty the largest owner of Southern California commercial office space to G.E. Capital.

Far be it from me to second guess the wisdom of two giants like Blackstone and GE, but as one that has looked at over a thousand properties in the last six months and only acquired one, I can testify that things are pretty pricey in the western states. Above all else, if Dick Ziman and Sam Zell are selling, I'm not sure I'm buying.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

As I wrote earlier today in Bloggingstocks, it looks like Cerberus Capital is not going to launch a rival bid for Equity Office Properties Trust (NYSE: EOP), which is currently in the process of being sold to Blackstone for about $36 billion (including debt).

Well, according to a report on CNBC, a deal for EOP might be imminent. That is, the massive real estate firm, Vornado Realty Trust (NYSE:VNO), is reportedly preparing a bid.

VNO's stock price is down about 1.87% on the news. After all, a deal might involve issuing a chunk of stock.

Then again, the commercial real estate market has been particularly strong. And, it appears that rents will continue to increase for some time, making it easier to pay premium prices for assets as a result.

And investors are betting that another rival will come, as EOP's stock price is up $0.85 to $50.70.

Blackstone's current offer is $48.50.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

According to a Reuters report today, it looks like Cerberus Capital is backing-off from a possible bid for Equity Office Properties Trust (NYSE: EOP). It would have been a mega deal, given that Blackstone is already in the process of buying the firm for roughly $36 billion (when the debt load is included).

Why did Cerberus drop out? It's hard to tell. But a big problem is the deadline for offers, which is February 18. Even though private equity firms can act fast, the EOP deal is nonetheless very complex. For example, Blackstone had to do quite a bit of negotiation with EOP's bondholders.

But of course another bid would have made things pretty crazy. What's more, it would have been a violation of the gentlemen's agreement in the private equity world not to spoil deals.

So they will remain gentlemen -- at least for now.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Early this week, there was a report from the Wall Street Journal (a paid service) that a group of investors would make a bid for Equity Office Properties Trust (NYSE: EOP). Of course, the company is already in the midst of a $36 billion buyout from Blackstone.

Well, so far, there has been no bid. But, Blackstone seems to be taking things seriously.

According to a piece in Bloomberg.com, Blackstone was able to convince a variety of resistant bondholders to take a tender offer. Basically, the firm had to pay-up. That is, bondholders will get a premium on their bonds of 25 basis points.

True, it doesn't sound like a lot. But, it is likely to exceed $100 million. But it was certainly worth it. Basically, Blackstone needs to get this deal done fast.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Blackstone, which is a marquee private equity firm, is having some difficulties with its massive $36 billion buyout of Equity Office Properties Trust (NYSE:EOP).

That is, Blackstone is trying to buy back $725 million of EOP's existing bonds. The big reason: there are covenants that could make it tough to get the necessary financing to do the buyout.

As a result, EOP's bondholders are playing hardball -- and rejected Blackstone's offer.

Basically, Blackstone will probably need to pony-up more money, making this expensive deal even more expensive.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Most Noteworthy: On an expected light trading day after Thanksgiving, Equity Office Properties (EOP) and Imperial Chemical (ICI) are the only two upgrades on today's list of upgrades.

• UBS Warburg upgraded Equity Office Properties Trust (NYSE:EOP) to Neutral from Reduce and raised their target for the stock to $53 from $39.
• Imperial Chemical Industries (NYSE:ICI) was also upgraded at Citigroup to Hold from Sell after the company sold its Quest unit to Givaudan.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

It's another mega deal: Private equity investor, Blackstone, has agreed to buy Equity Office Properties Trust for about $19 billion. The company focuses on office buildings.

Actually, if you factor-in the debt, the purchase price comes to about $36 billion.

As a result, the deal sets two records: a) the biggest going-private transaction and b) the biggest real estate deal.

Although, given the huge amounts of money in private equity funds, we are likely to see even bigger go-private transactions -- soon.

The founder of Equity Office Properties, Samuel Zell, is a legend in the real estate business. Over the years, he has had a uncanny ability to gauge market trends.

Interestingly enough, he will not be a part of the company on an on-going basis. Might he just want to take money off the table before a blow-up?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.