Blackstone Group LP (BX), builder of the biggest single-family rental home business in the U.S., is using its experience to replicate the model in Spain, where property prices have dropped up to 40 percent.
The world’s largest private-equity firm, which has spent $7.5 billion buying 40,000 homes in the U.S., agreed in July to purchase 18 apartment blocks from the city of Madrid for 125.5 million euros ($173 million). The firm is bidding against investors including Goldman Sachs Group Inc. for another 1,458 housing units being sold by Madrid’s regional government, according to three people with knowledge of the auction, who asked not to be identified because the information is private.
“Building a business from scratch without a single employee and buying something like $150 million in homes per week requires a learning process,” Anthony Myers, senior managing director of real estate at Blackstone, said at a conference in Barcelona last week. “When we looked at the situation in Spain, we thought we could see something similar, where we could replicate a lot of the systems and technology that we created in the U.S.”
The New York-based firm is seeking to transplant an investment that’s transformed housing in parts of Atlanta, Phoenix and California into one more suited to Spain. Blackstone is competing with foreign and domestic distressed investors that are seeking bulk purchases of low-cost housing units, mainly apartments that are already occupied, in cities where local governments need to sell assets to trim deficits<< Spain ends two-year recession with 0.1% growth