By Greg Roumeliotis and Herbert Lash

(Reuters) - General Electric Co is nearing a deal to sell practically all of its $30 billion real estate portfolio to a consortium led by Blackstone Group and Wells Fargo & Co, according to a person familiar with the matter.

This would be the biggest commercial real estate deal since Blackstone's acquisition of office landlord Equity Office Properties Trust in 2007 for $39 billion, including debt. It comes as the Federal Reserve is widely expected to raise interest rates later in the year, pushing up financing costs.

A deal could be announced as early as Friday, said the source, who requested anonymity because the deal is not yet public. GE and Blackstone declined to comment.

"We're in that sweet spot of 2007 when there's a lot of money, commercial real estate looks really attractive, and you could do some mega deals," said Ken Riggs, president of Situs RERC, a firm does commercial real estate valuations.

GE has been retreating from its property investments globally as it focuses on improving profits from sales of industrial products such as jet engines, generators, electric grid gear and oil field equipment. GE's industrial operations are expected to post a rise of at least 10 percent in profit this year.

Revenue from the company's real estate business fell 24 percent in 2014, partly due to a decrease in net gains on property sales.

Chief Executive Jeff Immelt has said he expects profits from the company's aviation, power & water and other industrial businesses to rise to 75 percent of the company's total by 2016 from 55 percent in 2013.

To achieve that goal, he has been remaking GE's portfolio of businesses, spinning off a retail finance operation, selling GE's appliance business to Sweden's Electrolux AB and agreeing to buy Alstom SA's power generation and electric grid business for $14 billion.

Blackstone said in November it would buy GE's property unit in Japan in a deal worth more than $1.6 billion. The private equity firm also bought warehouses and development land in the United States from GE's real estate unit.

GE shares ended 2.9 percent higher at $25.73.

The news was first reported by the Wall Street Journal.

Real estate accounted for about 7 percent of GE Capital's total $499 billion in assets related to continuing operations as of Dec. 31.

In his letter to shareholders last month, Immelt said his plan is to reposition GE Capital "as a smaller, safer specialty finance leader with less leverage and more liquidity."

(Additional reporting by Sagarika Jaisinghani in Bengaluru; Editing by Savio D'Souza, Don Sebastian, Andrew Hay and Richard Chang)