Madrid Earns €360M From The Sale Of Public Properties

25 March 2015 – El Confidencial

The Community of Madrid sold around thirty real estate assets between 2012 and 2014, including an entire housing development and a number of buildings on Gran Via.

The sale of public properties generated income of more than €360 million between 2012 and 2014. In total, during this period, around thirty real estate assets of all types were sold, ranging from an entire housing development, to a number of buildings in the heart of Gran Via, as well as flats, plots of land and commercial premises.

The starting gun for “property” sell-off began in the summer of 2012, with the sale of a plot of land for tertiary use in Pozuelo de Alarcón for €5 million. In the same year – when Spain was on the black list of all investors – Metro de Madrid sold another plot of land that it owned on Calle Cardenal Cisneros for €2.1 million.

However, the largest transaction signed to date by the Community of Madrid did not take place until July 2013. Then, it sold a 32 home development, owned by Ivima, to Azora and Goldman Sachs for €200 million, whereby the buyers paid almost 20% more than the initial asking price (€168.9 million).

At the end of 2013, two further transactions were signed that “fattened up” the public coffers by more than €26.5 million. These involved the sale of Gran Via 18 for €18.6 million to Iberia Project Management, although the Texas Pacific Group (TPG) was actually behind the bid – that fund purchased 51% of Servihabitat Gestión Inmobiliaria from CaixaBank in September of the same year. The second sale was of Gran Via 3, which the Community sold for €8 million to Baech Bienes Inmuebles.

Then in 2014, when real estate investment in Spain really took off, more than a dozen transactions were signed; the most noteworthy was the sale of a building measuring more than 9,000 square metres for €40.2 million to Línea Directa, the insurance arm of Bankinter. Last year, Gran Via 20 was also sold to the real estate company of Caja Rural de Almendralejo, which paid almost €20 million for the property.

The final two transactions last year were closed in December: a building on the Carretera de San Jerónimo, measuring 4,500 square metres for €14.1 million and another measuring almost 3,000 square metres on Los Madrazo for €3 million; both were owned by Arproma.

The plans to sell off public assets are on-going. The Community of Madrid has placed a “for sale” sign above another 22 assets that is owns. Office buildings, residential properties, commercial premises, plots of lands, flats and individual buildings. Through these, it hopes to “fatten up” the public coffers by around €56 million, taking advantage of investors’ renewed appetite for Spain.

Nevertheless, the jewels in the real estate crown have been sold already. By price, the following assets are up for sale: an office building on General Díaz Porlier, which has been on the market since October 2013 and for which the Community of Madrid is asking €11.1 million. In terms of land, there is a plot for sale in Tres Cantos for €5.8 million and there is also a flat for sale measuring 170 square metres on Calle Fernando el Católico for €467,000.

The Community is organising public auctions to sell these assets as well as direct sales. To give more visibility to its properties, like in the past, the Community has is making use of specialist websites, such as addmeet.com, which lists the assets sold to date, as well as the buildings for sale and the real estate auctions that are underway.

The sale of the building next to Puerta del Sol is on standby for the moment; the Community of Madrid is asking €10.7 million for that property.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

US Firms Buy Housing In Spain, Raise Rents And Evict Tenants

11 February 2015 – NY Daily News

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus have been quietly buying tens of thousands of residential properties in Madrid and Barcelona at low prices. In New York, advocates for tenants in Spain plan to protest at the headquarters of Blackstone Group.

It’s not just inner city neighborhoods like Harlem and the South Bronx where giant hedge funds have amassed breath-taking numbers of housing units in recent years, then sent rents soaring and sought to evict tens of thousands of longtime tenants.

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus are on a mission to conquer the housing markets of other countries as well, hoping to reap huge profits in the process.

In Spain, for instance, these firms have been vying quietly for two years to gobble up tens of thousands of residential properties in Madrid and Barcelona at fire sale prices.

None has moved more quickly than Blackstone, which is why a group of Spanish emigres in this country has joined with local housing advocates for a planned protest Wednesday outside Blackstone’s Park Ave. headquarters.

Even as unemployment has eased in our own country, Spain remains mired in deep depression — with a 25% unemployment rate, the collapse of several major banks and astronomical budget deficits. Spanish real estate prices remain 40% below their level in 2007. More than 700,000 citizens have fled the country since 2008 and some 3 million housing units sit empty.

Municipal and regional governments have resorted to selling off their small stock of public housing, along with residential mortgages previously issued by the failed banks.

Nearly 42,000 rental and mortgaged units, most of them in Barcelona, were gobbled up by Blackstone, which is already the largest owner of single-family residential housing in the U.S. Goldman Sachs bought another 3,900 units in Madrid.

Meanwhile, a conservative Spanish government made it easier for landlords and mortgage holders to evict residents who fall behind on their payments.

Between 2008 and 2013, more than 327,000 Spaniards were evicted from their homes. The public outcry became so great that a grassroots anti-eviction movement erupted, known as PAH. Thousands of people began squatting in empty apartments. The movement gained so much support that it forced the government to institute a temporary moratorium on evictions.

But just as in gentrifying neighborhoods in this city, new owners still drive up rents and harass tenants or delinquent mortgage holders into leaving, no matter what the law says.

And that’s what Blackstone has done, housing advocates claim.

“It is simply untrue to say that we are driving up rents and seeking to evict residents,” Blackstone spokesman Peter Rose said in an email response.

“We have an extensive series of programs to work with tenants to keep them in their apartments,” Rose added. “So far, only 11 tenants have been asked to leave out of more than 5,000 managed, and only then after a lengthy period of negotiation.”

“They can say what they want, but it’s not true,” said Carlos Macias, a spokesman for PAH.

The tactic of Blackstone and other private equity owners is to raise the rents on unemployed or impoverished Spaniards once their old leases expire. They then allow overdue bills to mount, and pressure tenants to leave, while they wait for the temporary moratorium on evictions to end.

“Those mortgages belonged to the Spanish people,” Macias claims, since Blackstone purchased many at low prices after the Spanish government had already nationalized the bank that issued them. “We’re not going to allow them to take our homes.”

The tenants in Harlem and Bed-Stuy and the South Bronx confronting new age private equity vultures are not alone, is the message coming from Spain

Original story: NY Daily News (by Juan González)

Edited by: Carmel Drake