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Your Wall Street Slumlord Arrives in Europe: Goldman Launches "Buy-To-Rent" In Spain
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Liberty Blitzkrieg was early in reporting on the trend of financial firms entering the U.S. residential real estate market with “all-cash” bids for tens of thousands of homes with the intention of turning former homeowners into permanent sources of rental income. The first of many pieces I published on the topic was in January 2013, titled: America Meet Your New Slumlord: Wall Street.
Now that the financial oligarchs have had their way with the U.S. property market, to the point that average citizens can’t even afford to own a home (Zillow recently showed that 1 in 3 homes are unaffordable), it appears they have turned their sights overseas. What better market for bailed-out bankers to feast on than Spain, with its 50%+ youth unemployment rate and a continued depressed real estate market.
We learn from Bloomberg that:
Marcelino Calvo Sanchez and his wife, Maria Luisa, had never heard of Goldman Sachs Group Inc. until last year, when the global investment bank bought the four-building housing estate where they live in Vallecas, on the southern outskirts of Madrid. Marcelino, a 71-year-old retired truck driver, isn’t impressed by his new landlord.
Goldman Sachs picked up the 289-unit complex in August 2013 as part of its purchase of 3,000 low-income apartments from the regional government of Madrid for 201 million euros ($269 million). With the sale, some subsidies for tenants disappeared, and, according to Sanchez, a small problem with squatters has become a larger one.
That’s exactly right, Bloomberg Markets will report in its October issue. Though the housing estate looks like one of the last places in the world smart-money Goldman Sachs bankers would bet on — glass doors are shattered, broken mailboxes hang open, and graffiti mars the courtyard walls — this is where Goldman has touched down in the Spanish real estate market. Blackstone Group LP, the world’s largest alternative-asset manager, bought a similar low-income-housing portfolio from the city of Madrid in July 2013 for 125 million euros.
These bets on Spain marked a turning point in investor sentiment. The country, for five long years a toxic no-go zone for foreign investors, is now at the top of the list for private-equity firms, hedge funds and sovereign wealth funds hunting for cheap assets in Europe.
“Spain now is a tale of two cities,” says Ismael Clemente, chairman and chief executive officer of Merlin Properties SA, which raised 1.25 billion euros in June in the largest initial public offering in Spain in three years.
I sometimes wonder when I hear people characterize the economy as a “tale of two cities,” if they even appreciate the fact that the book itself was written about the violent overthrow that was the French Revolution, itself sparked by extreme inequality and poverty.
Clemente, 44, is sitting in the art deco lobby of Madrid’s five-star Villa Magna hotel, which these days is crawling with investors and bankers chasing juicy deals. A 14-year veteran of Deutsche Bank AG, Clemente says the opportunities are enormous as Spain emerges from the depths of recession and banks continue to unload real estate assets.
Merlin’s IPO capped a dizzying six months of Spanish real estate deals. In January, the New York–based private-equity firm Apollo Global Management LLC bought the real estate unit of Banco Santander SA, Spain’s biggest bank by assets, for 664 million euros. In March, the Madrid-based REIT Hispania Activos Inmobiliarios SA raised 500 million euros from investors, including George Soros’s Quantum Strategic Partners LP and John Paulson’s Paulson & Co. In June, Texas-based private-equity firm Lone Star Funds and JPMorgan Chase & Co.bought a 4.4 billion euro portfolio of Spanish and Portuguese commercial property loans from Commerzbank AG of Frankfurt.
In the U.S., Auten was a managing director at Waypoint Real Estate Group, an Oakland, California-based investment firm that buys up foreclosed homes across the U.S. Auten says a lot of investors are looking at Spain, a country of 46 million, as if it’s a carbon copy of the U.S. market, where investors such as Blackstone and Waypoint have scooped up hundreds of millions of dollars’ worth of homes and rented them out.
I gave these serfs an offer they couldn’t refuse:
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Jamie Dimon looks like he's kicking cancer's ass! (Oh, it's an old photo (shop)?)
These bankers are 'financializing' every possible neccessity in life just to make more money. One day even PUBLIC WASHROOMS will become investment assets where these banks and PE firms will try to privatize it for the purpose of making money and degrading society even further.
I think we're pretty close to that. Just remove the word "public" and there you go (or DON'T go, as the case may be).
Let me guess... the purchase price will be variable and continuously adjusted upwards.
As long as they don't charge by the inch...
...No Scam...R E are real assets...change laws...attract foreign residents.
Like from this
http://www.telegraph.co.uk/finance/personalfinance/expat-money/10478342/...
to this?
http://spanishnewstoday.com/valencia-government-proposes-amnesty-for-ill...
Would you buy a used car from this man?
Goldman Sachs, America's Ebola! Infecting the rest of the world one crooked deal at a time.
I have lived in Spain for over a decade. These clowns don't have a clue as to the mentality of the people. goldman et al will get ass raped. Ole.
Wishful thinking. Doubtful.
That would be great, but I don't think they need to worry.....if Goldman pay the police properly, squatters and delinquents will get their skulls cracked.
Almost 100k per apartment in run down housing estates ?
This type bottomed out at about 5 K in East Germany
before rent subsidies lifted the market back up .
Without the rent subsidies , usually paid for by broke local
authorities, their would be no buyers. If you own a single
apartment in one of those housing blocks, you might find yourself on the hook for arrears of you co-owners , meaning
you have negative equity !
I wonder what the scam is.
When paper promises go bad you want to own real assets.
You still have to collect rent.
Lol, you really think they're doing this for the rent?
Market controlled liquidation by gov and insiders purchasing distressed loan portfolios. Public gets screwed with higher rental and tax cost.
http://online.wsj.com/news/articles/SB10001424052702304626304579505523027510260
http://online.wsj.com/articles/blackstone-beats-oaktree-in-spains-auction-for-loan-portfolio-1405537698
It's bass ackwards: It's "Buy-to-Rent", not "Rent-to-Buy"
Crooks know what people want to hear or see.
the gotham city bank holding company strikes again
Call Batman and robin.
You could double or triple property values in Spain by removing barriers to immigration and restricting new housing
Like in CA right?
Well, in CA we don't restrict new housing and it goes up anyway. It's the weather; which is kinda similar to Spain's weather. Hmmm...
You don't?
LOL, they had it half right for a while.
Huh, an entire 5 start hotel " crawling with investors and bankers chasing juicy deals. " It almost like some people are just smarter-n-savvier than other people. I bet it's a nice 5 star hotel too (well, goes without saying, I guess).
Ya gotta hand it to them smart-n-savvy people, they sure know how to live well.
I say we crowd-fund an effort to hand this mofo over to ISIS. Let them go all Uncle Ernie on his ass. In HD of course.
"turning former homeowners into permanent sources of rental income."
They weren't home 'owners' they were debtors that might get to 'own' the property they were maintaining and paying bills/insurance on for decades. At the end of that, if you are 'lucky' and it is worth 'something' the government takes a big chunk of it through inflation taxing and inheritance taxing
Renting is continually having to pay up to live there
Taxman. You're talking about the taxman.
thats why he makes more money then you, and gets cancer
It's from handling all that filthy disgusting paper money and eschewing physical silver.
[voice off camera: Bitcoin. You're talking about bitcoin. You don't touch it, no cancer there.]
I wonder if Dimon still has a Blythe pussy hairball in his throat?
LOL
[he tells everyone it's the chemo...]
I've never seen smiling look so painful
It must be the Chemo
I cant wait till they start buying in China.
it will be different this time... those poor spanish people will not go if they cant pay the rent anymore, and the police is far to weak to make em all go, and if they try the politicians in power will lose power in the next election to the socialist.
the 2 establishment partys were down to 49% in the eu vote this year.
Can you see this motherfucker with the "shit eating" grin wearing a gold Century 21 blazer attempting to sell you that house?!!!
Snap! ~ Rhythm Is A Dancer
http://www.youtube.com/watch?v=u_ppF2yK4NM (3:39)
Due to the beloved euro, renting, rather than home ownership, is the future in Spain. Investing in property for your old age will soon become a vague memory. Who cares about paper anyway? It's bricks that count.
Asshole shows his face in Serbia to fuck with their housing market, I'll arrange to kill him myself.
I will come to help ! Call me !
I'll use my Amex miles and buy you a first class ticket on Lufthansa. Cant believe this shit, they are turning out currency into toilet paper so these assholes can buy everything in site and make housing unafordable for everyone.
<<edit: posted against the wrong comment>>
Arrest Jamie Dimon
"a 71 yo retired truck driver, isn’t impressed by his new landlord"
Well if he is 71 and STILL living under someone else's roof HE GOT WHAT WAS COMMING !
Welcome to reality.
Scumlord. There. Fixed it.
VALLECAS.
"Father, forgive them, for they do not know what they are doing."
I don't brain it.
They cannot collect the rent.
They shell out 100k for an appartment, worth maybe 60k (observe "maybe").
The spanish people won´t be renting it;
1. either they have a rich persons from Mars, or
2. this is a whitewashing of drug profits
3. a cover-up for another fraud
4. they want to save some of their money (yeh, they will lose a lot , but not all) before the big crash will come (probably already infront of the door).
“You will never understand bureaucracies until you understand that for bureaucrats, procedure is everything and outcomes are nothing.”
- Thomas Sowell