Tag: tenants

Pontegadea, Deka & CPPIB Submit Bids For ‘Torre Espacio’

8 July 2015 – Expansión

Amancio Ortega’s investment company Pontegadea, the German investor Deka and the Canadian pension fund CPPIB have all submitted bids to acquire the Madrilenian skyscraper from Villar Mir.

The sales process for Torre Espacio, the skyscraper owned by Villar Mir in the Madrilenian Cuatro Torres complex, is progressing according to plan. Yesterday, one month after the property was first listed on the market, Villar Mir received offers from some of the companies it had selected to participate in the process.

Villar Mir, which owns the building through its real estate company Espacio, worked together with the real estate consultancy Aguirre Newman to select and invite around a dozen investors to participate in the sales process, rather than opting for a mass tender, in order to close the deal as soon as possible. Those selected included the German funds Deka, Reef and Patrizia, the Abu Dhabi fund Asia, the Socimi Merlin Properties, the real estate company Colonial, Amancio Ortega’s investment company Pontegadea, the sovereign fund Singapur GIC (which invests in Spain jointly with the real estate company GMP) and the Canadian pension fund CPPIB.

Of those, Deka, Canada Pension Plan and Pontegadea all submitted proposals yesterday. Indeed, the investment arm of Amancio Ortega has been one of the favourites to take ownership of the property since the process was launched, on the basis that the company has access to immediate liquidity and the building would be a perfect fit with its existing portfolio, which includes other large office and commercial buildings in major European capitals, such as London and Madrid, as well as in the USA.

The aim of the group controlled by Juan Miguel Villar Mir was to sell the property for between €650 million and €700 million, and whereby benefit from the investor boom that is taking place in the Spanish real estate market. The company invested €400 million on the construction of the building, including the amount it paid to Real Madrid for the land (€187 million). Nevertheless, according to sources close to the process, the offers received range between €500 million and €600 million. (…).

Tenants

Torre Espacio opened in 2007 and has office space of c. 60,000 m2, distributed over 57 floors. The tower is 236 metres high and its tenants include large international corporations, such as British American Tobacco and Red Bull. It has an occupancy rate of 85% (84.3% at the end of 2014). Other tenants include the embassies of Australia, Canada, the Netherlands and the UK.

Furthermore, 55.1% of the building is occupied by the Villar Mir Group. OHL occupies around ten floors.

To make the purchase more attractive, the owner of OHL has offered to continue as a tenant and guarantee the new landlord rental income of €34/m2/month. However, the market does not believe that such a rental price can be maintained considering that the maximum rent in the best buildings on the Castellana barely exceeds €30/m2/month. (…).

Following the receipt of the bids, one or two candidates will be chosen to participate in exclusive negotiations, with a view to closing the transaction in October. Nevertheless, the proposed structured of the transaction, as well as the difference in terms of price expectations between the vendor and the buyers, may hamper the completion of the transaction. (…).

Original story: Expansión (by R. Ruiz and D. Badía)

Translation: Carmel Drake

Villar Mir Guarantees Torre Espacio’s Buyer Rent Of €26M

3 July 2015 – Cinco Días

Inmobiliaria Espacio, which forms part of the Grupo Villar Mir, wants to generate the maximum amount from the sale of the iconic Torre Espacio, one of the four skyscrapers constructed on Real Madrid’s former Ciudad Deportiva. To this end, it is willing to guarantee 100% of the building’s rental income, and pay the difference if the new owner does not reach the maximum occupancy rate.

According to sources close to the operation, Villar Mir has put a figure on the table of €26.4 million per year. This means that the purchaser will receive the same monthly rent, regardless of the occupancy rate of the building.

Torre Espacio, which has 57 floors and is 230m high, has a total leasable area of 60,142m2, as well as 1,173 parking spaces. The building currently has an occupancy rate of 85%. Companies in the Grupo Villar Mir occupy 55% of the leasable area and the corporation, which is controlled and chaired by Juan Miguel Villar Mir, will continue to rent offices in the skyscraper. The other tenants include four embassies: Canada, UK, Australia and the Netherlands.

The real estate company has offered to guarantee rental income of €35 per m2 per month, which represents an annual rent of €25.2 million. In addition, the rental cost of the parking spaces amounts to another €1 million, which takes total annual rent to €26.4 million. Inmobiliaria Espacio would retain control of the rental management of the property and of finding tenants. Nevertheless, it is likely that some investors will waive their right to the guarantee, as they will prefer to take care of the management side themselves.

With this commitment, the real estate company thinks that it will come close to the €600 million asking price for the sale of the tower. That would represent an annual yield of 4.40%, but that is rather low, according to market sources; if interest rates rise over the next few months, the viability of the tower’s financing may be put at risk.

Villar Mir has set a minimum asking price of €500 million, which represents a valuation of around €8,500/m2. The market considers that price to be high, since Pontegadea, the family office owned by Amancio Ortega, paid around €5,000/m2 for its acquisition of Torre Picasso, and the March family paid around €7,500/m2 for Ahorro Corporación’s headquarters in Castellana, 89.

On the plus side, Villar Mir’s real estate group may benefit from increased liquidity in the market and the interest shown by international funds in the recovery of the country. Even so, analysts do not expect that many candidates will have the capacity to invest €500 million or €600 million in an asset that is not in Azca, the prime business district in Madrid. (…).

‘Due diligence’

The group chaired by Villar Mir has launched an accelerated process for the sale of the building. Anyone wishing to becoming the new owner must submit non-binding offers by next Tuesday. The real estate company expects to choose the best offer during the course of the week.

Then, the candidate with the best offer will begin the due diligence process, which will last for three weeks, until 29 July – all of the experts in the market consider this timeframe to be tight. The binding offer will be made by 29 July and the transaction will be closed during the first week of August.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Investment In Shopping Centres Exceeds €1,000M In H1 2015

1 July 2015 – El Confidencial

During the first three months of 2015, investment in shopping centres tripled to €520 million, compared with the €150 million recorded during the first quarter last year. In fact, in barely three months, the figures exceeded the sum of those recorded between 2010 and 2013. As such, the sector will close the first half of the year with total investment of just over €1,000 million and will reach €3,000 million within 19 months.

Those are the forecasts made by the consultancy Knight Frank, which expects that 2015 will close above the historical average, but that the investment volumes seen last year will not be repeated.

“Whilst 2014 and 2015 so far have been characterised by investment in prime shopping centres, of considerable size, the next few months will see investment opportunities involving smaller, core plus and value add products, in secondary cities”, says Elaine Beachill, Capital Markets Manager at Knight Frank. “Over the last 18 months, activity has focused on the best streets and areas of Madrid and Barcelona, but from now on, we will see transactions right across the country”.

In terms of the performance of shopping centres, Knight Frank highlights the strong results of smaller local centres, located in urban areas and secondary cities with a significant area of influence. The segment least affected by the crisis has been the prime High Street. Rents in retail stores on the main streets have remained stable and they have experienced low vacancy rates. “In fact, there is a significant shortage of space on the prime High Street and when a store becomes available, it is leased out very quickly”, says Félix Chamizo.

Nevertheless, established secondary sites – traditionally in less demand – have been the first choice for certain foreign brands setting up in Spain for the first time. That is the case of Hema, Dealz, Tiger and the Chinese retailers Mulaya and Okeysi. There is growing interest from retailers and investors in the area around la Puerta del Sol. Projects in the surrounding area, such as Canalejas, indicate a possible increase in rents in the area and certain retailers are already taking up position.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Villar Mir Puts ‘Torre Espacio’ On The Market For €700M

30 June 2015 – Expansión

A new mega real estate transaction is taking shape in Spain, involving ‘Torre Espacio’ – the 236 metre tall skyscraper that the Villar Mir Group owns in the Cuatro Torres Business Area, in Madrid.

The Villar Mir Group, owner of the OHL construction company and the Espacio real estate company, has just put one of the most iconic buildings in the capital up for sale. According to sources close to the process, the property, which contains 60,140 m2 of office space, has an asking price of between €650 million and €700 million.

Villar Mir’s decision to sell the building, through a process organised by the consultancy Aguirre Newman, comes barely a month after the company was awarded the plot of land adjoining the Cuatro Torres, where it will construct a new skyscraper.

The sale of Torre Espacio, which opened in 2007, will generate significant capital gains for the company owned by Juan Miguel Villar Mir, which invested €400 million to buy the site and construct the building. That amount includes the €187 million it paid to purchase the land, as well as all of the financial expenses incurred during the construction period.

Torre Espacio, which was the first of the four buildings in the complex to open, has an occupancy ratio of 85%. Its tenants include the Villar Mir Group, some of its subsidiaries (Fertiberia, Ferroatlántica and Espacio), as well as the embassies of the UK, Netherlands, Canada and Australia.

According to initial calculations, when the tower is fully leased, it will generate annual income of €28 million.

Original source: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Blackstone To List Its Socimi ‘Fidere Patrimonio’ On MAB

25 June 2015 – El Mundo

Blackstone is going to list Fidere Patrimonio on the Alternative Investment Market (‘Mercado Alternativo Bursátil’ or MAB). The Socimi was constituted with a stock of social housing purchased by  the private equity firm in Madrid in recent years. The shares in the new Socimi will start trading on Monday 29 June, at €21.08 per share. This price represents a company valuation of €212 million.

Blackstone created Fidere Patrimonio with a portfolio of 23 social housing developments (rental properties), containing 2,688 apartments, which the fund has bought over the last few years, mainly in the Community of Madrid. (…).

With this IPO on the MAB, Blackstone seeks not only to comply with the rules governing Socimis, but also to acquire a financing mechanism for raising funds, which will to drive the future growth of the company, and will also “raise the company’s profile and attract new shareholders”.

In this sense, Fidere Patrimonio says that it will focus its investment policy on new companies with real estate portfolios owned by Blackstone’s investment funds and on “analysing new investment opportunities that arise in the market”.

‘Solvent’ tenants

However, the Socimi has said that, for the time being, it will focus on managing its current portfolio of homes “with the aim of increasing shareholders’ returns”. To this end, it has revealed that its leasing policy for social housing is based on “selecting tenants who are economically solvent and who have long-term visibility over their income”, in order to increase the occupancy rate of its homes.

Specifically, the company asks its tenants to provide their last two payslips and then checks that the percentage rental spend will not exceed 40% of their (respective) salary; it also performs checks to confirm that prospective tenants are not registered on Asnef’s credit black list. (…).

Blackstone’s Socimi is aiming to secure an occupancy rate of between 80% and 95% for its housing stock, compared with its current rate of 76% and the 2014 year-end rate of 68%.

Profits and dividends

Meanwhile, Fidere Patrimonio closed 2014 with a net profit of €1.6 million, whereby overcoming the “losses” that it had recorded in the previous year. The Socimi’s turnover amounted to €5.54 million, of which €4.6 million was generated by the social housing in Madrid that the fund purchased from the EMV.

In terms of financing, the firm has financial net debt of around €65.7 million, equivalent to 22% of the market value of its assets. The company considers that this “reduced” leverage will encourage the payment of dividends.

Original story: El Mundo

Translation: Carmel Drake

The Owner Of McKinsey’s HQ Puts Its RE Portfolio Up For Sale

19 May 2015 – Expansión

 More than €200 million / The Cotoner family is selling six buildings in Spain and two in Paris

A new batch of office buildings has sparked interest amongst large investment funds, Socimis and family offices. There are eight buildings in total – six in Spain and two in France – located in some of the most iconic streets of both countries. In total, they occupy a combined surface area of more than 27,000 m2 and generate more than €3 million in annual rental income.

The assets are owned by the company Marzabal S.L., created by the Cotoner family to manage its real estate assets. They include eight buildings: two in Pairs, one in Navarra, another one in Bilbao and four in Madrid. The jewel in Marzabal’s crown is located in the capital: the current headquarters of McKinsey. The consultancy firm has occupied the building, located on Calle Sagasta 31, for years, as well as several floors in the adjoining building. Both are owned by the company now for sale.

In total, the building houses 10,114 square metres of office space (fully leased) and 93 parking spaces; it generates annual rental income of €1.64 million.

Rental income

The other buildings in Madrid include a historical building (from 1923) on Avenida de Felipe II; another one on Paseo de Eduardo Dato; and a third on Francisco de Rojas, occupying more than 4,400 square metres and leased to several tenants, including the distance learning university, Uned. Currently, they generate rental income of more than €500,000 per year.

Marzabal also owns a residential building in Tudela (Navarra), built in 2013, measuring more than 2,650 square metres, which also houses several shops on its ground floor.

In Bilbao, the company owns a residential property measuring around 800 square metres, located in the old town, next to the San Francisco de Asís church.

The company for sale is the owner, in turn, of a company based in Denmark, which owns two office buildings in Paris. One of them, located in the “second district” of the French capital, houses office space measuring 2,100 square metres and is fully leased to the private equity company Partech International.

It generates rental income of almost €900,000 per year.

The second asset in Paris includes four office buildings measuring 4,200 square metres and 39 parking spaces. The property, located on Pereire Boulevard does not currently have any tenants.

Bids are expected to amount to more than €200 million for the batch of assets, although the book value of the Spanish assets amounts to €68 million, with share capital of €10.4 million and net financial debt of €34 million. The Danish company, which owns the two properties in France, is worth €62 million; its share capital amounts €37 million and has net financial debt of €24 million. The Spanish entity’s main creditors are BBVA and Santander; the Danish entity’s main creditors are Crédit Foncier and BNP.

Bids are expected to be received during the first half of June and the process will close during the following three weeks. The sale is being managed by the private banking division of Banco Santander and the firm Aiga Investment.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Investors On The Hunt For Prime RE Assets

20 April 2015 – Expansión

Opportunities / The Spanish real estate sector has aroused interest from all types of purchasers, from those that are more opportunistic in nature to those that are seeking lower risk. Offices, shops and shopping centres are the most sought-after assets, but hotels and logistics centres offer the best returns.

The volume of investment has increased from just over €3,000 million to more than €8,500 million in only 12 months. That has been the evolution recorded by the non-residential real estate segment, which reflects the highest level of interest from all kinds of investors in Spain. Thus, the Spanish market has become the second most attractive country for investment in Europe, according to the consultancy CBRE.

But, what are these investors looking for in Spain? Based on the nature of the deals closed last year, offices and commercial assets (both shopping centres and high street stores) are the most sought after. “The transactions that spark the most interest have a value of between €40 million and €50 million, rely on financing for 50-60% (of the price) and generate an initial return of between 5% and 7%. Investors are looking for buildings with: occupancy rates of more than 70%; solvent tenants; and (lease) contracts lasting for around 6 years”, explain sources at JLL, based on data collected in a survey prepared together with the Iese Business School from more than 100 investors.

Excess demand for buildings, and for offices and shopping centres in particular, has led to “very competitive processes for star assets, i.e. those that are best placed in terms of location or that have high rentals, as well as good buildings that require management to improve their profitability”, explain sources at Catella. “Socimis and US funds are very active, along with institutional funds. All of them are creating strong investor pressure”, they add.

The fierce competition has meant that offices and commercial assets no longer offer such high returns, and so many investors have started to invest in other kinds of assets, such as logistics and industrial centres and hotels. Thus, whilst deals involving offices in prime locations offer a return of 5.5%, well-located industrial assets generate a return of 8.25% and logistics centres in secondary areas produce returns of up to 9.5%, explain sources at Deloitte Real Estate.

In the hotel segment, the experts predict that the volume of investment in 2015 will exceed that recorded last year (€1,081 million) thanks to deals involving distressed assets and the activity of debt portfolios, given the shortage of attractive assets.

Renovation

Another possibility being considered by investors looking to enter the Spanish market and make a good return is the recovery of out-of-date properties or those without good lease contracts, through their renovation. “On the one hand, Socimis are looking to purchase offices, logistics assets and shopping centres that guarantee a return of between 6% and 7.5%. On the other hand, we have the real estate funds owned by private equity firms, which are looking for riskers assets that offer higher returns, such as properties that require renovation or land that needs developing. The expected returns in those cases can exceed 15%”, explain sources at Deloitte RE.

“Investors are becoming increasingly sophisticated and demanding. As has happened in other European countries, the most efficient buildings are going to be the key and, in the case of the financial district in Madrid, they have the lowest availability rates in Europe for that type of asset, which opens an important niche, both for investment as well as for the renovation of existing properties”, say source at Knight Frank.

Original story: Expansión (by R. Ruiz and Y. Blanco)

Translation: Carmel Drake

What Does The Future Hold For Azca?

16 March 2015 – El Confidencial

In Madrid, the ‘City’ is called Azca. It is the capital’s financial centre par excellence and, yet, a third of the office space in the area is empty. (According to sector experts), the time for change in upon us.

In Madrid, the ‘City’ is called Azca. It is the capital’s financial centre par excellence, home to iconic buildings such as Torre Picasso and many of the world’s leading companies own the properties, including Pontegadea (the real estate company owned by Amancio Ortega), GMP, Mutua Madrileña, El Corte Inglés, Metrovacesa, Testa and Infinorsa. The prime location, in the heart of the Paseo de la Castellana and next to one of the capital’s major transport hubs, Nuevos Ministerios, meant that until a few years ago, this area accounted for the majority of the capital’s prime office space. However, the opening of the Cuatro Torres, the arrival of the economic crisis, the departure of large companies to peripheral areas (of the city) and the lack of investment, both in the properties themselves as well as in the surrounding area, have dampened Azca’s appeal.

The combination of these elements has also had a significant affect on prices. Between 2008 and 2014, prime rents in the capital fell from €39/m2 to €25/m2 (per month), whilst in Barcelona, rents decreased from €22/m2 to almost €14/m2 (per month), according to a report called “Understanding the Office Market in 2014”, prepared by Deloitte Real Estate. The final nail in the coffin in terms of the pressure on the area came with the departure of KPMG, which (last month) decided to leave its headquarters in Torre Europa to move to the Torre de Cristal, at Real Madrid’s former Sports City (Ciudad Deportiva).

Furthermore, BBVA is set to leave its traditional black skyscraper to relocate to the suburb of Las Tablas, and the tenants of the Torre Saint Gobain and Torre Titania are planning to fully vacate; the latter was built by El Corte Inglés on the foundations of the former Windsor. In total, around 67,000 square metres of the 272,000 square metres of above-ground office space in the area is (currently) available to let, which gives rise to the question: is Azca doomed to reduce its prices further?

The answer is no, according to all of the experts, although they admit that the area is at a turning point. In their view, Azca is living through its own catharsis, which may be summarised by the classic phrase – adapt or die. And the widespread belief is that the former will happen. “Right now, Azca has an opportunity to reinvent itself as the ‘City’ of Madrid once more, but it must know how to seize it. In terms of its location, it has the right ingredients and moreover, the higher the vacancy rate, the easier it will be”, say the experts at Deloitte.

In Madrid, barely 2% of the office space in the high quality buildings inside the M-30 is vacant.

In this sense, a public-private initiative, known as the Azca Master Plan (Plan Director de Azca), is underway, which seeks to open up the area and facilitate access from El Coste Inglés in Nuevos Ministerios to the Bernabeu, through three targeted efforts: construction work to improve (the area in general), environmental initiatives and planning. This would mean, amongst other aspects, modifying some of the uses (of the area); the main challenge is to convert the area that is the capital’s business district during the week, into an area for families, shopping and leisure on the weekends, rather than leaving it half empty when the office lights are turned off (on Friday night), which is what happens at the moment.

“Azca must become a digital icon that adapts to incorporate technological developments, that uses the facades of the buildings (creatively), that puts up digital screens to attract young people (to the area) at the weekend, that organises initiatives for the neighbours (of the area) and the wider city, that becomes an icon of ‘digital Madrid’, in the style of New York’s Times Square”, says Ángel Serrano, Business Director at Aguirre Newman.

His company is managing the last major transaction in the area, the sale of Castellana, 89, in which a great deal of interest is being shown; the price may reach €140 million. The same interest was seen recently in the bid to acquire the Torre Saint Gobain, which GMP ended up purchasing for €90 million (with plans to spend a further €14 million on its refurbishment) and the land that El Corte Inglés purchased from Adif for €136 million, when the starting price was €40 million.

These transactions confirm the conviction that the major landlords in Madrid have that Azca is going to emerge stronger from the current situation, which means it will be able to increase its prices again in the medium term. Nevertheless, for the time being, it will have to endure a couple of years “crossing the desert”, during which time GMP, Infinorsa and whoever ends up winning the bid to acquire Castellana 89 will refurbish their buildings as well as the Torre BBVA (where the bank will continue to occupy the top five floors and display its logo on the outside), Torre Saint Gobain and, most likely, the Torre Europa.

It is expected that all of these construction works will be carried out in parallel to the aforementioned Master Plan to relaunch the area, which means that now is the perfect time (for tenants) to move to Azca before all of these improvements have been completed and prices increase. “We are currently experiencing a historic moment in terms of low prices, which provides the perfect opportunity for many of the companies that moved out of the centre and now want to move back. Moreover, this is supported by the gradual recovery of the economy and the privileged location of Azca, which I think will play an important role in its favour (in the future)”, says José Luis Guillermo, managing partner of Inmospace. Nevertheless, in his opinion, this metamorphism of the area will require support from the Public Administrations, not only in terms of the necessary changes to certain uses (of the area), but also in terms of the adoption of measures to promote the entry of multi-national companies into the capital’s ‘City’.

Experts consider that now is the time to move to Azca, before prices rise.

Madrid has some of the highest forecasts for (rental) income growth over the next five years of any city in Europe. Currently, according to data from Knight Frank, its vacancy rate amounts to 11.9%, although in the central business district, known as in the jargon of the trade as CBD, the figure decreases to 7.3%, and for Grade A buildings (highest quality) within the M-30, the vacancy rate is a low as 2%. This means that there are very few good buildings (available) in prime areas in Madrid.

In this context, a third of the leaseable office area in Azca is currently vacant and, despite that, both the experts and the large investors that are bidding to purchase buildings expect average rental income in the area to return to €30/m2 (per month), i.e. 20% more than now, over the next five to seven years. How come?

Patricio Palomar, Director of Alternative Investments at CBRE provides a good summary of where Azca is going and the price of its rentals: “To analyse the evolution, three points should be taken into account: the Master Plan for the area, which will favour (higher) prices; how Azca is going to change in terms of immediate availability, since various buildings are currently being refurbished, which will work in the area’s favour, but that will also mean there is more supply and therefore, tenants will have greater bargaining power, which may contain the increase to some extent. The third element is that there are few square metres concentrated in one area in Madrid and there are few high quality buildings for tenants looking to rent more than 10,000 m2 of space inside the M-30; a supply that Azca will indeed have (in the not too distant future). Add to that the fact that many tenants of this type, which moved to peripheral areas in the past, now want to return to locations such as this one, make me think that we will see price increases”.

Original story: El Confidencial (by Ruth Ugalde)

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

Podemos Targets Goldman in Spain, EU Insurgents Attack

20 January 2015 – Bloomberg

The anti-austerity party Podemos, leading Spanish polls less than a year before the next election, is targeting Goldman Sachs Group Inc. (GS)’s purchase of social housing in Madrid, saying it’s a predatory type of investment that should be stamped out.

Podemos is highlighting transactions such as Goldman’s 201 million-euro ($234 million) acquisition of rent-protected apartments as it works out policies to reduce inequality in Spain and draw millions of unemployed workers back into the labor force after a seven-year slump.

“They know that at a certain point the protected rents will expire, and when that happens, they will throw the tenants out,” Juan Carlos Monedero, a member of Podemos’s executive committee, said in an interview. “They are enriching people who already have more money than they know what to do with, and in turn they are forcing people to live on the streets.”

Governments across the European periphery are braced for an assault by anti-establishment parties channeling voters’ anger at the budget cuts their official creditors demanded in return for financial support. Greek Prime Minister Antonis Samaras is first up, trailing the main opposition party Syriza ahead of this weekend’s general election. His Spanish counterpart Mariano Rajoy has to call a vote around the end of the year.

Naked Calendars

Podemos has led in most opinion polls since November. The party had the backing of 28.2 percent of voters compared with 19.2 percent for Rajoy’s People’s Party, in a Metroscopia poll of 1,000 people conducted Jan. 7 and 8 for El Pais newspaper. A separate poll for the ABC newspaper published Jan. 18 gave Rajoy 29.3 percent and Podemos 21.1 percent.

Goldman Sachs and its junior partner Azora purchased 3,000 apartments that the Madrid regional government had set aside for low income families in August 2013. Blackstone Group LP (BX), the world’s largest alternative-asset manager, and its partner Magic Real Estate bought a similar portfolio from the city of Madrid in July 2013 for 128.5 million euros.

A group of tenants from the blocks bought by Blackstone created an association to fight the terms of the sale, which saw them lose the chance to buy their homes after ten years, according to Arantxa Mejias, the head of the group. To help finance its activities the association produced a calendar featuring nude pictures of the families living in the buildings.

Goldman’s London-based spokeswoman Fiona Laffan declined to comment when contacted by Bloomberg. Andrew Dowler, a spokesman for Blackstone in London, also declined to comment.

Podemos’s Plans

In economic terms, Goldman and Blackstone’s investments proved prescient. Spain emerged from recession in the third quarter of 2013 and the property market began to pick up a year later. Yet the investors may still not be able to escape the fallout from the financial crisis.

With unemployment at 24 percent, more than double the European Union average, Podemos is luring voters by promising to re-engineer the Spanish economy to give opportunities to those who’ve been marginalized by the crisis. Leader Pablo Iglesias plans to increase public investment and reject the demands for austerity which forced officials to sell off assets such as public housing.

Iglesias will visit Greece this week to support his ally, Syriza leader Alexis Tsipras, in the final days of his general election campaign. Iglesias is aiming to use a Syriza victory in Greece as a stepping stone to help him claim power in Spain.

Should he achieve that, a Podemos government would promote a debate about the ethics of Goldman’s real estate investment.

“I don’t care whether that’s legal,” Monedero said. “We still have to discuss it.”

Original story: Bloomberg (by Esteban Duarte)

Edited by: Carmel Drake