The USA’s Largest RE Firm Launches its Second Socimi in Spain

15 December 2017 – La Información

The largest real estate company in the United States, Lennar Corporation, has just redoubled its commitment to the Spanish market with the creation of a second Socimi. The aim is to reinforce the role already being played by its company Al Breck Socimi, to optimise the performance of the real estate assets that the US giant owns in Spain, through this special tax regime.

The operation has been formalised through the company Rialto Capital Management, one of the investor vehicles – headquartered in Luxembourg – that Lennar uses to carry out real estate operations in Europe and the only one that has a stable structure in Spain. Rialto Captial is listed on the Mercantile Register, according to information provided by the website Informa, as the sole shareholder of the new company, Ceres Real Estate Socimi. In turn, Ceres is the heir of Clearfield Invest, a firm constituted just over two months ago and whose administrators form part of the team in Spain of Grupo TMF, a company specialising in the provision of all kinds of services for companies.

This singular sequential corporate structure is identical to the one that preceded the launch of Rialto Capital’s other Socimi, Al Breck, between September 2014 and October 2016. In that case, a parent company Cornwall Invest was constituted with three subsidiary companies. Two months after the creation of those companies, the firm Al Breck Luxembourg, which Rialto Capital owns outright (100%), acquired Cornwall Invest, which acquired the three subsidiary companies a week later, as the prologue to the formal application for adopting the special tax regime afforded to Socimis.

Al Breck Socimi took over the management of the portfolio of real estate assets acquired by Rialto Capital and Drago Capital from Inverseguros, the collective investment platform created back in the day by several insurance companies and which was the first real estate fund to be registered with the CNMV. The package included parking spaces, offices, shops and homes, most in very central areas of Madrid, and was valued by the company in the MAB incorporation document, at €110 million.

According to Lennar’s annual report for 2016, besides that operation, the company only formalised one other operation last year, namely a real estate development in which it invested USD 1.6 million (…).

Rialto Capital’s new Socimi is feeding a market on the rise; this year alone 17 new companies with a combined asset portfolio of more than €4.5 billion have joined the MAB (…).

In October, Lennar Corporation became the largest real estate company in the USA after closing the absorption of Cal Atlantic, the most important company in the state of Virginia. According to the local press, the operation has resulted in the creation of a giant with annual revenues of USD 17 billion (€14.4 billion), a market capitalisation of USD 18 billion (€15.26 billion) and a portfolio of more than 240,000 properties.

Original story: La Información (by Bruno Pérez)

Translation: Carmel Drake