TOKYO, Dec 12 (Reuters) - Blackstone said on

Thursday that it will acquire a high-end office building in

central Tokyo for $2.6 billion, a deal it says is the biggest

real estate investment by a foreign investor in Japan.

The firm will acquire the 36-storey Tokyo Garden Terrace

Kioicho office and hotel complex from Japan's Seibu Holdings ( SEIBF )

in an effort to free up the railway and property firm's

balance sheet.

The deal highlights global demand for the Japanese

commercial real estate market that has low borrowing costs and

stable rents.

Reuters reported in March that Seibu ( SEIBF ) was considering selling

the building for at least $2 billion.

($1 = 152.4400 yen)