Cerberus & Blackstone Compete to become Largest RE Firm in Spain

16 October 2018 – Expansión

The US funds Cerberus and Blackstone are battling it out for first place on the podium in the Spanish real estate sector. Cerberus, which has just completed the purchase of 80% of BBVA’s real estate business, has invested more than €10 billion in real estate transactions in the country over the last year. Specifically, Cerberus will now control 80% of Divarian Propiedad, the company to which BBVA has transferred its real estate business and in which the bank will retain the remaining 20%. The groups have not disclosed the price of the transaction or the value of the assets included in Divarian, although the bank did indicate at the time that its intention was to transfer assets with a gross accounting value of approximately €13 billion at an estimated price of around €4 billion.

Anida’s workforce

Divarian, which is going to be managed by Cerberus, will incorporate the specialist staff from BBVA’s former real estate platform, Anida, comprising 400 professionals, into its team.

In addition to this operation, known as Project Marina, Cerberus reached an agreement with Santander in the middle of September to purchase a portfolio of residential properties for around €1.535 billion comprising 35,700 properties, including parking spaces and storerooms. This transaction followed Project Jaipur – a portfolio of property developer loans also acquired from BBVA -; the portfolios Challenger and Coliseum, with a combined gross value of around €9.1 billion, acquired from Sabadell; and Ágora, the portfolio that Cerberus purchased from CaixaBank.

In addition to the purchase of real estate portfolios, Cerberus is the owner of: Haya Real Estate, the largest independent Spanish servicer with €40 billion in assets under management; the property developer Inmoglacier; the online real estate agency between individuals Housell; and Gescobro, the debt recovery company.

The fund, which has not specified how much it has invested since it arrived in the country, has become, together with Blackstone, one of the most active players in the purchase of doubtful debt portfolios (NPLs) and foreclosed assets (REO) with real estate collateral, and has closed more than 30 transactions in Spain over the last five years, even before the recovery of the sector.

Testa

Meanwhile, Blackstone has acquired around €20 billion in property since 2012, to which the Socimi specialising in residential rental assets, Testa, must be added, given that the US fund now controls 70% of that firm’s share capital. The fund marked a milestone last year when it purchased 51% of Banco Popular’s real estate business from Santander, with a book value of around €10.3 billion. To group together the assets, Blackstone and Santander created Project Quasar Investment, a company that includes Aliseda.

The fund is also the largest owner of hotels in Spain through HI Partners and Hispania, one of the leaders in the logistics and office ownership market in Spain.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Blackstone has Created a RE Giant in Spain Worth €20bn

4 September 2018 – Expansión

In just five years, the US fund has become the largest owner of hotels and one of the biggest landlords in the country. Moreover, it manages several major mortgage portfolios.

Blackstone made its first foray into the Spanish real estate market in July 2013, with the purchase from the Municipal Housing and Land Company of Madrid (EMVS) of 18 residential developments, containing 1,860 homes in total, in the Madrilenian neighbourhoods of Carabanchel, Centro, Villa de Vallecas and Villaverde for almost €126 million.

Since then, the US fund, one of the largest investment firms in the world, has turned the Spanish real estate sector into one of its favourite destinations for investment, encouraged by the boom that the market in Spain has experienced over the last five years.

Blackstone’s dominance in the Spanish market is now unquestionable. Since 2012, the US fund has acquired property in the country worth almost €20 billion and it is now the owner of several listed vehicles, as well as of some of the main asset managers in the country.

With that figure, which accounts for 20% of the €100 billion that Blackstone Real Estate has invested around the world, the firm is the country’s largest private manager of real estate assets, including properties and portfolios of mortgages.

In Spain, the fund was one of the first to back the residential segment when the real estate market was still struggling and it has been one of the most active players in the purchase of asset portfolios containing NPLs and REOs from financial institutions.

The fund’s purchase of homes in Madrid from EMVS in 2013 was soon followed by the acquisition of another 1,000 social housing properties from Sareb and FCC. Those homes are owned by Fidere, the fund’s first Socimi, which made its debut on the Alternative Investment Market (MAB) in 2015.

In the same year, Blackstone completed its first major operation with the purchase from Catalunya Caixa of a portfolio comprising 40,000 loans in total, worth €6.4 billion. Blackstone paid €3.5 billion for that portfolio, known as Hercules.

A year later, the US fund purchased the Catalan entity’s real estate manager (without any assets), which was later renamed Anticipa.

Nowadays, that company manages the more than 12,000 rental homes which Blackstone has been purchasing from the banks in different portfolios and which it controls through the Socimi Albirana, which made its stock market debut in 2016, and Torbel Investments.

Popular’s property

Two years after purchasing the Hercules portfolio, Blackstone hit the headlines again with the purchase from Santander of 51% of Banco Popular’s real estate business, with a book value of around €10.3 billion. With that acquisition, Blackstone increased its commitment to Spain and become the most active overseas investment fund in the country. To group together those assets, months later, Blackstone and Santander created Project Quasar Investment, a company that also includes the marketing platform Aliseda (…).

In addition, (…) the US fund has launched itself into the hotel segment, to take advantage of the good times being enjoyed in the tourist sector at the moment. Blackstone’s first incursion into that market in Spain was the acquisition of HI Partners from Sabadell last summer for €630 million. Through that platform, Blackstone owns 17 hotels in Spain comprising more than 4,500 rooms.

Takeover of Hispania

A few months after that acquisition, the US investment firm made a bid for Hispania, the Spanish Socimi specialising in hotels managed by Azora, which owns 46 assets and almost 13,150 rooms in Spain (…). Following that operation, which valued the Socimi at €1.99 billion, the US fund controls almost 91% of Hispania.

As well as hotels, Hispania owns 25 office buildings, with a market value of more than €600 million and residential assets worth €230 million, which now also form part of the fund’s assets (…).

Blackstone is also a star player in the logistics sector. The fund currently controls 10% of the Pan-European platform Logicor, which manages approximately 1.2 million m2 of logistics space in Spain (…).

Also, in July, it purchased five logistics warehouses from the Socimi Lar (…) for almost €120 million.

The fund’s most recent purchase was the headquarters of Planeta, located on Avenida Diagonal in Barcelona, which it acquired from the Lara family for €210 million (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Santander & Blackstone Hold Onto the Real Estate Company GAC40

18 May 2018 – Voz Pópuli

Project Quasar Investment, the company created by Santander and Blackstone to bring together Banco Popular’s real estate assets worth €30 billion, has absorbed the company ‘Gestión de Activos Castellana 40’ (GAC40), whose debt amounting to €220 million Popular forgave on 30 December 2014, a move that caught the attention of the European Central Bank.

According to sources familiar with the operation, GAC40 filed for creditor pre-bankruptcy after it found itself in the cause of dissolution, but that measure was cancelled after the formal agreement was reached to transfer Popular’s assets to Project Quasar Investment in March. Sources consulted describe the operation as a “bargain”, given that Santander and Blackstone have effectively acquired GAC40’s assets at a discount of almost 69% and without the burdens that was weighing it down.

The Hispania Buildings in the centres of Murcia and Alicante are just two of the assets owned by GAC40. The company also owns the following shopping centres: La Fuensanta in Móstoles (Madrid); Juan de Borbón (Murcia); and Hispania, in Orihuela. Moreover, it has one supermarket in Totana (Murcia) and another one in Vinarós (Castellón), as well as a hotel in Cartagena. Although most of the properties are occupied, the mortgage charges that had been hanging over them since the real estate boom meant that their sale was unfeasible, according to the sources consulted.

The properties form part of Grupo Hispania, which the businessman Trinitario Casanova, the same person who agreed the sale of Edificio España in Madrid to the Riu group last year, sold in 2008 to José Ramón Carabante – the former shareholder of real estate companies from the boom and the founder of the only Spanish team to have operated in the Formula 1 arena, Hispania – for €650 million.

Carabante abandoned the management of Grupo Hispania in 2011 and was replaced by José Fernando Martínez Blanco, an expert in the liquidation and restructuring of companies. According to the sources consulted, Martínez Blanco was appointed by Banco Popular to acquire Carabante’s companies.

Martínez Blanco changed the registered name of the companies acquired from Carabante to ‘Gestión de Activos Castellana 40’ (GAC40) in 2012. The firm was weighed down by a debt amounting to €562.5 million, with Banco Popular as the main creditor. Until the absorption of GAC40 by Santander and Blackstone, Martínez Blanco had continued as the administrator of the company.

Forgive and refinance

GAC40 has remained active all these years thanks to financial support from Popular, which has been forgiving and refinancing the company’s debt year after year.

On 30 December 2014, Banco Popular’s Board of Directors decided to waive GAC40’s debt. That decision caught the attention of the European Central Bank, which conducted an inspection and identified “deficiencies” in the authorisation of the operation, as this newspaper reported.

The most recent refinancing of GAC40’s debt happened a month after the intervention of Banco Popular and its sale to Santander. On 6 July 2017, the company agreed “as the primary financial creditor”, to “convert the debt into a participation loan amounting to €19.4 million”.

With that debt conversion agreed just a month after Popular’s intervention, GAC40 was able to correct the critical situation that it found itself in. According to the company’s accounts for 2016, to which this newspaper has had access through Insight View, the company was in cause of dissolution with a negative goodwill balance of €221 million and financial debt of almost €250 million.

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Santander & Blackstone Inject €300M into their Real Estate Company

11 May 2018 – Eje Prime

Banco Santander and Blackstone are starting put the finishing touches to the bank’s sale of Popular’s real estate assets to the fund. As part of this process, both companies have decided to inject €300 million into Project Quasar Investment, the jointly owned real estate firm that they created in March to receive the €30 billion in assets transferred by the bank in the summer of 2017.

Blackstone owns 51% of the real estate company, whilst Santander owns the remaining 49% stake. The constitution of the company was undertaken with a minimum share capital of €3,000 and forms part of the commercial steps that both entities need to perform to close the operation, according to El Economista.

In addition to purchasing the majority of Popular’s real estate assets, the US fund also purchased Aliseda, the extinct bank’s servicer, from Santander, through which it will pilot the sale of the assets acquired. Part of this portfolio management process explains why Quasar has appointed Diego San José as its President, a strong man from Blackstone’s real estate department in Spain.

The following directors will work alongside San José to lead the real estate company: Eduard Mendiluce, CEO of Anticipa Real Estate, the US fund’s own asset manager; Christophe Dubois, Director General of Real Estate at Blackstone in London; and Jean François Pascal, the President of Fidere Patrimonio.

Meanwhile, on Santander’s side, it will be represented by the bank’s Head of Real Estate, Javier García Carranza Benjumea; its Director of Non-Performing Assets, Jaime Rodríguez Andrade; and the Metrovacesa board member appointed by Santander, Carlos Manzano.

Original story: Eje Prime

Translation: Carmel Drake