The talks that began in early February value SOHO China at 77 cents per share (HKD $6), about twice the average January trading price of its shares in Hong Kong at 39 cents (HKD $3.03).
The deal could be finalized in the coming weeks, the sources told Reuters, and Blackstone would take over any debt held by SOHO China.
The construction company, founded in 1995, had reported a debt of $4.7 billion by June 2019 in its latest earnings report.
Blackstone was one of the participants in SOHO China's sale of prime commercial property in Beijing and Shanghai.
The sources told Reuters that buying the entire company rather than individual properties would be a less complicated affair for the New York-based private equity firm.
SOHO China's shares traded 37.6% higher at $4.10 HKG at press time in Hong Kong.
Blackstone's shares closed 13.10% lower at $46.98 on Monday and traded 2.49% higher at $48.15 in the after-hours session.