Blackstone to sell Boston office properties -source

By Greg Roumeliotis and Mike Stone

May 18 (Reuters) - Blackstone Group LP has agreed to sell several Boston office properties to a real estate investment consortium led by Oxford Properties Group for approximately $2.1 billion, a person familiar with the matter said on Sunday.

The deal is the biggest divestment of U.S. offices by Blackstone since the financial crisis and underscores the gradual recovery of that market. U.S. office prices increased 6.2 percent in the 12 months to March 2014 as office employment growth continued to outpace the wider job market and construction levels remained low, according to real estate information provider CoStar Group.

The source declined to be identified on Sunday because the deal is not yet public. Blackstone and Oxford Properties Group declined to comment.

An additional Boston holding, the office and hotel property Rowes Wharf, was said to be in the process of a sale to Blackstone's existing partner in the property, Morgan Stanley , according to a report by the Wall Street Journal on Sunday.

The buildings are part of the portfolio Blackstone took over in its $39 billion acquisition of Sam Zell's Equity Office Properties in 2007.

Other bidders for the group of properties, according to the newspaper report, were the government of Singapore, the government of Norway and insurer Metlife Inc. None of those parties were immediately available for comment on Sunday.

Oxford Properties is the real estate arm of the Ontario Municipal Employees Retirement System.

(Reporting By Mike Stone; Editing by Steve Orlofsky)