Article: Investment Bank Is in Foreclosure on Two Chicago-Area Suburban Properties.

Byline: Thomas A. Corfman

Mar. 5--A highly leveraged gamble on the suburban office market by Blackstone Group is backfiring, but the prominent New York investment bank may not feel the losses as much as the mortgage holders.

Blackstone, whose chairman is former Nixon administration Commerce Secretary Peter G. Peterson, is in foreclosure on two small, suburban office properties and is negotiating to hand back a third development to a lender. A spokesman for Blackstone declined to comment.

The total amount of the past-due loans is small, less than 1 percent of the more than $4 billion equity that Blackstone has raised for real estate deals over ...

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