Tag: Eduard Mendiluce

Blackstone will be the Landlord of 25,000 Rental Homes by the End of 2019

31 January 2019 – Voz Pópuli

Blackstone, one of the largest investment companies in the world, expects to end the year with 25,000 rental homes under management in Spain.

Eduard Mendiluce (pictured above, left), the man from Blackstone who leads the US giant’s real estate emporium in Spain, has explained that the firm believes in the Spanish market, as it has done since 2014, and will end 2019 managing 10,000 more rental homes that it currently owns (15,000).

“We continue to believe in the fundamentals of the residential sector in Spain”, said Mendiluce at a conference about the real estate sector organised by Iese in Madrid. “Spain was one of the countries that suffered the most during the real estate crisis of 2008; prices are still 30% below their maximums”, he said.

The CEO of Aliseda and Anticipa explained that the US fund’s strategy in Spain in terms of real estate involves renting or buying and selling second-hand homes worth between €120,000 and €150,000. “When you have more than 200 homes under management in a given municipality, the business becomes profitable”, he explained.

Blackstone has invested almost €26 billion in the Spanish market over the last five years. In March 2014, it purchased 40,000 problem mortgages from Catalunya Caixa for €3.6 billion.

Since then, it has purchased: Banco Popular’s toxic property, together with Santander, for more than €5 billion; the Socimi Hispania for €2 billion; and 50.01% of the rental home Socimi Testa for €947 million. Last year, it bought Cirsa, a leading company in the gaming industry in Europe in a deal worth €2 billion.

In terms of the criticisms directed at the rental policies of Blackstone and other funds from certain sectors, Mendiluce has highlighted that in Spain, the funds own just 3% of the total rental housing stock, and that the rest is in the hands of individuals.

“I think that it is difficult to manipulate prices when you only account for a small percentage (of the market)”, he said. “I firmly believe that if there has been very concentrated price inflation in a handful of towns, then that has been due to a lack of supply”, and he pointed out that Spain has the lowest percentage of social housing in Europe.

Fashionable market

Juan José Brugera, President of the real estate company Colonial, was very optimistic about the real estate sector in Spain.

“We are in an expansive phase of the cycle, we are facing lower growth, but growth is growth, and it’s strong in Spain”, he said at the conference organised by Iese. “In the rental cycle, we are still in the growth phase, we have potential for rental growth that we believe ensures a strong performance over the next two or three years” he said.

“The Spanish market is fashionable at the moment, we predict expansive behaviour”, he said. “I have a positive vision, the stock market is behaving a bit strangely, but I think that is due to certain turbulences, both external and internal, that are generating uncertainty”.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

2018: The Year that Blackstone was Crowned the King of the Spanish Real Estate Sector

17 December 2018 – Eje Prime

Blackstone wants it all and it wants it now. That is the sensation that the US investment fund, the new king of the Spanish real estate market, is transmitting throughout the real estate sector. Its portfolio is worth more than €20 billion after an accelerated period of purchases during 2018.

One of the objectives of the US fund manager has been, precisely, to expand its network in the Spanish real estate sector by entering markets such as the logistics segment. At the beginning of December, the company closed its latest operation in the country with the purchase of a logistics portfolio from Neinver for €300 million.

Nevertheless, the deal involving the giant Neinver is by no means the most significant operation that Blackstone has undertaken this year. Over the last twelve months, the group has taken control of Hispania, to grow in the hotel sector; it has acquired 80% of Testa, to manage thousands of rental homes, and in the logistics sector, it has accumulated 1 million m2 of space with the 55 assets from Neinver and the purchase of an industrial portfolio from Lar España.

Blackstone has disbursed almost €4 billion in the Spanish real estate sector this year, a figure that far exceeds the €127.5 million that it spent on its first investment in the domestic market in 2013. Moreover, that debut was not free from controversy, given that the group purchased 18 residential developments, containing 1,860 social housing units, which the Town Hall of Madrid sold the fund through the Municipal Housing and Land Company of Madrid (Emvsa).

Five years later, Blackstone is one of the largest owners of residential assets in Spain and the leader of the hotel sector. It leapt to first position in the hotel market ranking this year following its successful takeover of the Socimi Hispania. The company paid €1.99 billion for that vehicle, managed by Azora. With that operation, the fund added 46 assets and almost 13,150 rooms in Spain to a portfolio that it started to grow in 2017 with the purchase of HI Partners, the hotel arm of Banco Sabadell, for €630 million. In total, the manager owns 63 assets and almost 18,000 hotel rooms across Spain.

Hispania also provided Blackstone with residential assets worth €230 million, as well as 25 office buildings whose market value exceeds €600 million. Also in that segment, the company added the iconic Planeta office building in Barcelona to its portfolio during 2018, which it purchased from the Lara family in July for €210 million.

Spain, 20% of its global portfolio

Today, Spain accounts for 20% of Blackstone’s global investment. In total, the US firm owns property worth almost USD 120,000 million (€105,387 million) around the world. This real estate giant has become the largest unlisted real estate company in Spain (…).

The superiority of Blackstone’s portfolio in Spain with respect to those of the large domestic real estate firms is clear. The two largest players, Merlin and Colonial, are ranked within the top 15 Socimis in Europe and, yet, their portfolios are worth just half of that of the fund, at €11.785 billion and €11.19 billion, respectively.

Santander’s best friend

As well as mixing with other real estate players, Blackstone has made friends with some of the Spanish financial institutions. The banks, big losers in the previous real estate cycle, have worked hard over the last two years to place their property with the highest bidder, taking advantage of the new boom in the residential market.

In this way, in 2017, Banco Santander agreed with Blackstone the largest operation involving the sale of toxic assets from the real estate sector in the country. The fund manager purchased 51% of Popular’s property, a portfolio with €30,000 million in assets.

The relationship with the bank owned by the Botín family has been strengthened in 2018 with Project Quasar, the real estate firm created by the financial institution and the fund. The joint venture received a capital injection amounting to €300 million in May. Through this vehicle, the transfer of Popular’s assets is being carried out.

In order to place this property into circulation, as part of the operation in 2017, Blackstone also acquired the bank’s servicer, Aliseda, led by Eduard Mendiluce (…), who also manages the Socimi Albirana.

Albirana Properties is one of four residential Socimis that Blackstone currently has listed on the Alternative Investment Market (MAB). The others are Fidere Patrimonio, Corona Patrimonial and Torbel Investments.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Blackstone Publicly Criticises the Government’s Rental Housing Plan

13 November 2018 – Voz Pópuli

The company that has invested the most money in the Spanish real estate sector over the last five years, Blackstone, has publicly criticised the Government regarding its rental housing plan, which includes several measures that will directly impact the US company’s business in Spain.

Blackstone’s most senior representative in Spain, Claudio Boada, has warned that he views with “concern” the plans unveiled by Pedro Sánchez’s Government in this regard. Boada was speaking at a breakfast meeting this morning organised by the United States Chamber of Commerce in Spain (Amcham Spain) with the Minister for the Economy, Nadia Calviño, in attendance, at the Villa Magna Hotel in Madrid.

Claudio Boada, Senior Adviser at Blackstone for Spain and Portugal, was speaking after Calviño’s presentation, at a symposium led by Jaime Malet, President of Amcham Spain, and attended by more than fifty representatives of US companies in Spain. He warned that the US group regards with “concern” the plans unveiled by the Government for rental housing, and he pointed out that his company has invested €25 billion in the country in recent years “backing Spain during the worst years of the crisis”.

In particular, Boada referred to the project to return the duration of rental contracts to five years, versus their current duration of three years (as a result of the Urban Rental Law, dated June 2013), which will be applicable for physical persons. In those cases where the lessor is a legal entity, the minimum duration will be seven years.

The most senior representative of Blackstone in Spain, who attended the meeting together with Eduard Mendiluce, who leads the investment firm’s real estate business, requested channels of dialogue with the Minister for the Economy to address the matters.

The plan from the Government regarding rental homes affects the buoyancy of Blackstone’s core business in Spain. The company chaired by Stephen Schwarzman has been purchasing large packages of mortgages corresponding to more than 100,000 rental homes from Spanish banks over the last five years (…).

The group has taken advantage of the financial and real estate crisis to acquire those homes and mortgages at significant discounts, but it has taken the risk of making the operations profitable by trying to improve the management of those properties.

For Blackstone, whose motto is “buy, fix and sell”, its business involves renting out homes purchased at the most profitable prices possible taking into account the large discounts that it typically obtains upon acquisition. It also gets rid of tenants who do not pay their rent.

For this reason, the plans announced by the Government regarding rental homes affect the US group so much, given that far from making the rental sector more flexible, they would actually slow it down. Problem tenants, those who refuse to pay or leave a rental home, will presumably be given more time to dig their heels in (…).

Royal Decree on the horizon

“Blackstone has not threatened to stop investing in Spain”, said sources close to the investment company consulted by this newspaper at the end of the symposium organised by Amcham Spain. They added that the firm’s intention is very much to continue investing.

Nevertheless, the same sources indicated that Blackstone does require the possibility of entering into talks with the Administration to express its view regarding the rental policy, and that they believe that the Government will approve the new measures in this regard by Royal Decree this month. The company considers that there could be several alternatives reflected in the parliamentary procedure for the new regulation.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Blackstone Launches Large Sale of Buildable Land After Acquiring Aliseda

6 September 2018 – El Confidencial

It was just a matter of time. Aliseda, the servicer of Banco Popular, now controlled by Blackstone (51%) and Santander (49%), is starting the school year by looking for buyers for 270 residential plots and work in progress developments, with a total buildability of more than 2 million m2, distributed throughout Spain.

It is the most important land sale currently underway in Spain and, unlike what is happening in other areas of the market, it will not involve a block sale of assets, but rather possible interested parties may acquire each plot individually, which will allow for the entry of local property developers into a market that has been dominated until now by large property developers and investment funds.

The assets are located in 43 Spanish provinces. They consist of 231 plots in total, mainly buildable plots or plots under development, and 39 projects in progress. Many of the sites are located in Galicia, Levante, Costa del Sol and the Canary Islands; the latter market has been especially active in recent months.

“Unlike other sales processes, the operation that Aliseda is now putting on the market allows investors the possibility of submitting an offer for any of the plots independently, which means that they can structure the perimeter that best suits their needs and investment criteria. In this way, both local property developers, as well as institutional investors will have the opportunity to participate under equal conditions”, says Adolfo Blázquez, Director of Land at Aliseda.

Local developers and national developers looking to grow in volume and build large developments may bid for the plots, as may institutional investors looking to buy large blocks of buildable land – a scarce and very sought-after asset, especially in the hottest markets of Madrid, Barcelona and the islands.

Meanwhile, Samuel Población, National Director of residential and land at CBRE, the exclusive consultancy firm selected to launch the sales process, says that “the shortage of buildable land in the Spanish market has become one of the great barriers for property developers. Thus, the activation of residential land sale processes, such as this operation by Aliseda, places prime raw material on the market, which will gradually start to satisfy the high demand that currently exists”.

The process began on 7 September, with access being granted to information about the assets, and will go on until December with the closure of selected bids.

In March, the US fund and Banco Santander created Proyecto Quasar Investments, the holding company that groups together the real estate portfolio of Banco Popular and the marketing platform Aliseda. Blackstone controls the majority of the capital in the new company and also takes care of its management, led by Eduard Mendiluce, the CEO of the company. Mendiluce is also the most senior executive of Anticipa, the other large real estate firm that the fund owns in Spain and the former head of Catalunya Caixa Inmobiliaria.

Original story: El Confidencial

Translation: Carmel Drake

Blackstone & Santander Finalise the Transfer of Popular’s Portfolio

22 March 2018 – Eje Prime

Blackstone and Santander are signing their agreement. Sources close to the operation have explained that the two groups are on the verge of sealing the deal that will see Blackstone take control of 51% of the share capital of the new company that is going to be created with the €30 billion in real estate assets from Popular. The new entity is going to be known as Quasar.

The US fund is also going to be responsible for managing the new company and its CEO is going to be Eduard Mendiluce, who is also the most senior executive at Anticipa, the other large real estate company that the fund owns in Spain, according to Expansión. Santander will own the remaining 49% of the shares in Quasar.

The new Project Quasar Investments has agreed to take out a syndicated loan for €7.3 billion from a group led by Morgan Stanley and Deutsche Bank. Blackstone itself is participating in the loan, through one of its subsidiaries, which will see it contribute €1 billion or 14% of the financing.

In parallel, the fund and Santander are going to contribute €3 billion in share capital to the company, which will amount to more than €10 billion. It is worth remembering that Popular’s non-performing loans were appraised at €10 billion, the book value at which they have been registered on the bank’s balance sheet after the clean-up carried out by Santander.

Original story: Eje Prime

Translation: Carmel Drake

Blackstone & Santander’s RE Company Hires Liberbank Director

14 February 2018 – Voz Pópuli

Banco Santander and Blackstone are appointing the management team of what is going to be one of the largest real estate real estate companies in Spain. Aliseda, the platform in which the fund owns a 51% stake and the bank holds a 49% share, has hired José Luis Bellosta, a Director of Liberbank until now, as Director General, according to confirmation provided by sources to this newspaper.

Bellosta completes Aliseda’s management team, which is led by Eduard Mendiluce as the CEO. Mendiluce is a former director of Catalunya Caixa and is one of Blackstone’s key people in Spain.

Two General Directorates report into Mendiluce: the one run by Bellosta, which will be responsible for managing the more than €4 billion in real estate assets that Popular (in other words, the Santander Group) still holds on its balance sheet; and the other, led by Enrique Used, whose appointment was revealed by Vóz Populi, which will manage the divestment of the €30 billion transferred to Blackstone – Project Quasar.

It is not the first time that Bellosta has worked under the Santander umbrella. He previously served as Director of the Asset Custody and Back Office Subsidiary of the group chaired by Ana Botín between 2003 and 2009. Subsequently, he worked for six years at Agrupalia before being hired as the CEO of FK2, the operations subsidiary of Liberbank.

In this way, Aliseda’s structure is now ready for the launch of the new divestment plan designed by Mendiluce, whilst it awaits the authorisations that should arrive within the next few weeks.

Blackstone also manages Anticipa, the platform inherited from Catalunya Caixa Inmobiliaria. The fund has decided to not merge the two companies – Aliseda and Anticipa – and so each one will follow its own path.

Meanwhile, Santander also owns 15% of Altamira, the real estate company in which Apollo holds the remaining 85% stake. The bank and the fund held negotiations over a year ago regarding Apollo’s exit, but without success. The new situation could revive that operation.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Blackstone Builds Rental Home Giant In Spain

18 May 2017 – Cinco Días

The fund Blackstone is the largest property owner in the world and has been backing real estate Spain for a while now. And, it is going to continue to do so in the short to medium term. For the time being, the fund’s plans involve becoming a giant in the rental housing segment and it is already starting to show its investment strategy through several companies, including three new Socimis.

Blackstone’s first major step was to create the servicer Anticipa Real Estate, under the structure of the former entity Cataluña Caixa Inmobiliaria. This asset management platform purchased 40,000 mortgages from the extinct Catalan entity for €4,123 million in 2015. Since then, it has continued acquiring these kinds of mortgage portfolios, to accumulate a total investment to date of almost €7,000 million.

The latest acquisitions made by Blackstone – which is headquartered in New York – have included a €400 million portfolio of loans backed by property developer collateral and another portfolio from BBVA comprising 3,500 properties, for around €300 million.

This entire portfolio of mortgage debt and properties is managed by Anticipa, a company that is led by its CEO, Eduard Mendiluce, a veteran director in the sector. (…).

The work that the servicer performs for Blackstone involves managing the loans granted by banks to individuals and property developers. In many cases, that task ends with the “dación en pago” or foreclosure of the property or development, due to non-payment. The company says that it treats each client on a case by case basis, and the process often means it has to accept a discount on the debt.

Of the portfolios acquired from banks, “daciones en pago” and foreclosures, Anticipa already owns 12,000 properties, which are leased out (in around 75% of cases) and put up for sale. “The idea is for it to become one of the large owners of rental housing in Spain”, explains a spokesperson.

The opportunistic fund – which purchases problem assets at a discount – is planning to remain in the Spanish market beyond the short term, and has absolutely no interest in selling its businesses within the next 5-7 years, but rather intends to benefit from the upwards trend in property.

To create the residential giant, the US firm has started to create vehicles to which it will transfer properties for rent. The first of these companies is Albirana Properties, a Socimi that started to trade on the Alternative Investment Market in March. That listed investment company, which benefits from certain tax advantages, already manages 5,000 homes.

But it is only the first to be listed. Other Socimis, namely Pegarena and Tourmalet, which have already been constituted and are already owned by several Blackstone funds, will follow. These firms, in turn, operate using Anticipa as their manager. (…).

Packaging up these homes into different companies will facilitate the sale of those companies in the future to various interested parties.

Blackstone decided to back the rental sector rather than the sales market at a time of change in the type of demand, according to experts in the sector. In particular, the generation of millennials, for cultural reasons – are more inclined to live without the tie of a mortgage – and, above all, the difficulties being faced by young people to obtain loans given the job insecurity.

Unlike other Socimis that specialise in rental housing, the management of assets by Albirana is more complex, given that its properties are relatively scattered geographically, as they proceed from individual mortgages. Typically these companies opt to manage entire buildings, but Blackstone’s company has specialised in what is known as granular management.

Currently, the majority of these properties are located in Cataluña. They are followed – at some distance – by homes in Madrid, Comunidad Valenciana and Andalucía.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Anticipa Strengthens Its Commitment To The Rental Business

30 November 2016 – Economía Digital

Anticipa is continuing to grow its rental home business. At the end of 2015, the real estate manager bought a batch of empty homes from Banc Sabadell, specifically, 3,700 properties that it has been incorporating into its portfolio over the last few months. In addition it owns 5,500 homes from the real estate stock of the former Catalunya Caxia, the seed for the current firm Anticipa.

“We are clearly in a buying position” said Eduard Mendiluce, CEO of the company, in comments to La Vanguardia. The group has already formalised its offer to buy the Eloise portfolio that Sareb or the bad bank has put up for sale. This package of unpaid loans to property developer includes 150 buildings, containing around 4,000 homes”.

“We are already one of the largest rental home real estate companies in Spain, and we have an orderly portfolio, with market profitability and the capacity to continue growing, by incorporating more homes”, said Mendiluce.

Renegotiation of mortgages

According to explanations given by the director in a recent interview with Economía Digital, Anticipa is renegotiating 3,000 of the mortgages that it inherited from the Catalunya Caixa portfolio in their first year of life. 2,400 will result in “daciones en pago” (the cancelation of the debt in exchange for handing over the keys) and another 600 cases will see their terms and conditions renegotiated, in such a way that homeowners will be able to afford their debt repayments.

Original story: Economía Digital

Translation: Carmel Drake