Spain’s Housing Construction Boom Comes from Minnesota


17 August 2017

  • US vulture funds lead bets in the residential market
  • Blackstone becomes a huge property owner after buying 51% of Popular’s real estate assets

7,000 kilometres away from Madrid, in the US city of Minneapolis, Minnesota, decisions have been taken that have affected the recovery of the housing construction sector in Spain. The firms Värde Partners and Castlelake – known as opportunist, or vulture funds – had the opportunity to enter a depressed real estate market in the face of a foreseeable recovery. But they are not the only big U.S. investors who risked buying at bargain prices and restarted the bull market. Who is behind these companies?

One of the most active is Värde Partners, a Minneapolis-based company created in 1993, which began to buy troubled assets in Spain during the worst years of the financial crisis, at the beginning of this decade. The highlight of Värde’s participation in the Spanish market was its acquisition of Grupo Empresarial San José’s residential development business, to whose portfolio it added the land that it had been purchasing.

With that basis, Värde created the real estate company Dospuntos, one of the several firms created by the American investment funds to free up construction projects that had been paralyzed since the 2007 property market crisis. After that deal, it returned to the market at the beginning of 2017 when it bought the Spanish real estate developer Via Célere from Juan Antonio Gómez-Pintado, who was chosen to lead the newly merged company as its chief executive, and whose objective is a listing on the stock market early next year.

In parallel, Värde acquired 75% of the recently started developer Aelca from the Avintia group, which strengthened its position in housing construction. Aelca already had plans to start works on 1,900 new homes, adding to Via Célere’s 1,700 homes.

The fund has invested $50 billion since its inception and its chief executive is Marcia L. Page, a veteran alternative asset manager. Tim Mooney, responsible for Värde’s real estate business, has designed Värde’s investment strategy in Spain, which also includes the purchase of part of the property business of Procisa, which constituted the company La Finca Global Assets. In addition, Värde, together with the investment fund Kennedy Wilson, bought a majority stake in Aliseda, Banco Popular’s banking platform, that it resold recently after Santander acquired the bank.

The other Minnesotan investment fund behind the new construction boom is Castlelake, which has a total of $10 billion in assets under management around the world. It was created in 2005 and specializes in investments in troubled companies, distressed debt and mortgage loans in complicated situations. Castlelake has been buying land in Spain since 2012 and created the real estate company Aedas Homes, which is expected to go public this fall. The Minneapolis firm was created by Rory O’Neill, a manager from another similar fund called CarVal Investors, and Evan Carruthers, who serves as managing partner.

As an aside, this fund is also specialized in the purchase and management of aircraft for leasing. It has a fleet of 400 aircraft, comparable to the giant IAG, which has 530 aircraft, and 835 engines for the aircraft. The European team at Castlelake, which leads the real estate investment strategy in Spain, is located in London and led by Eduardo D’Alessandro.

Its real estate developer Aedas Homes has some of the old team from Vallehermoso and plans to begin construction on around 1,700 homes sometime in 2017.

The vulture fund which was the fastest to make its bet on the Spanish real estate market is Lone Star. The fund, based in Dallas, and whose name refers to the one star on the Texas state flag, bought the real estate developer Neinor from Kutxabank for €930 million.  Lone Star proceeded to inject new land into the developer’s portfolio and restarted its residential construction business.

Lone Star then launched an ambitious plan to turn the renamed Neinor Homes into the country’s largest real estate companies, practically the only one with plans for developments throughout Spain, a far cry from the small regional developers that survived the crisis.

In addition, it was ahead of other companies on their way to a market listing, when it debuted last March, in what became the first initial public offering of a real estate developer in the Spanish market in a decade. That move also allowed Lone Star to divest 60.1% of the capital of a company that was valued by the market at €1.3 billion.

Neinor is expected to be another of the market’s leading developers to head to the stock exchange, together with Aedas, Vía Célere and Metrovacesa, controlled by Santander (61% of capital) and which is already studying a possible IPO.

Lone Star, which in Spain is run by the Argentine Juan Pepa, was created 22 years ago in Dallas, founded by fund manager John P. Grayken. That firm has launched 17 investment vehicles in which it has bought troubled assets and debt in much of the world.


The Blackstone fund, the largest real estate owner in the world, has created a housing giant in Spain from foreclosed properties and the purchase of toxic assets from banks. Its latest move was the acquisition of 51% of a joint venture, for 5 billion euros, which will manage 30-billion euros in property assets acquired from Banco Popular, making it the largest real estate company in the country, ahead of Sareb.

Blackstone was created in New York in 1985 and currently manages assets worth $370 billion. In Spain, it created Anticipa, a platform that manages assets acquired from banks, which already has 12,000 homes for rent. To manage them, it formed the socimi Albirana Propertis, which is listed on the Alternative Stock Market. It also owns Fidere, another socimi that manages the portfolio that the asset management company bought from the Municipal Housing Company (EMV) of Madrid.

In the field of bank servicing, which appeared as banks were looking to divest their problematic real estate assets, other funds have also been active, although some have already sold off, such as Kennedy Wilson and Värde with Aliseda. TPG remains in Servihabitat, the platform linked to Caixabank. The Californian vulture fund entered the market in 2013. That year, Santander also sold its platform Altamira to the New York-based Apollo fund.

Original Story: El País/Cinco Dias – Alfonso Simón Ruiz

Translation: Richard Turner