He entered the scene after the ravages of the brick crash in Spain, buying assets at demolition prices that banks had been awarded due to defaults by individuals or bankruptcies of promoters. Like the one that started a building with 24 homes in A Cañiza; The works began in 2006 and it was half done. Now it is the Fortress fund, of the Italian financial group DoBank, which is looking for interested parties to auction it off and look for tenants. “All the players they are reviewing their portfolios right now, there are many movements ”, states the delegate in Galicia of Gesvalt, Diego Esquer. In sum, vulture funds and financial entities have more than 5,000 real estate properties for sale in Galicia, according to market data analyzed by FARO. His portfolio has doubled in just three years.
There are many real estate, but there are also many owners. In addition to Blackstone and Fortress – the latter acquired Altamira from Apollo, another fund specialized in assets distressed (vulture fund) -, this game is also played by the Swedes from Intrum, Cerberus Capital Management or Lone Star Funds (both from New York), as well as managers of financial institutions (such as Abanca). Only the first accumulates 955 properties for sale in Galicia, almost the same as Cerberus (965, through the servicer Haya Real_Estate) and below a thousand Lone Star (Servihabitat). Intrum, through Solvia, sells another 245 properties, for the 370 of Fortress (Altamira). “This once again distorts the market a bit, at the price level,” continues Esquer, also responsible for the Advisory and Companies department of the appraisal company. Given that the commercial network of this type of company is, at best, limited, “local alliances are produced with real estate agencies for commercialization”.
Continuous bet
The fact that their portfolio of properties has increased does not mean, at all, that they are not selling their portfolio. “This type of firms are acquiring new packages”, both from financial institutions and other funds. “There is a lot of liquidity in the market, they have seen the opportunity and they are going to take advantage of it.” As this newspaper published this month, the movements are not limited only to the purchase of portfolios of flats, industrial buildings or land. There is the irruption of KKR & Co, with another 561 properties throughout Galicia. With one difference: it does not have a website (servicer) to market a garage or commercial premises, since, in its case, it bought a portfolio of delinquent loans from Abanca. Through its subsidiary ProSil Acquisition SA, KKR assumes the management of the collection of a mortgage, for example; if this does not occur, the property is awarded.
“They are reviewing their portfolios, right now there is a lot of liquidity in the market”
“The entity sells a loan package, not a flat or a house. What the fund does with that later depends on many factors “
Esquer refers to the impact on prices due to the emergence of these actors on the real estate board, because precisely the funds are specialized in acquiring portfolios at a great discount. “The entity sells a loan package, not a flat or a house. What the fund does afterwards with that depends on many factors ”, pointed out expert sources in the sector. Those 561 KKR properties had a target auction price of 32.27 million, although their face value was around 100. Even selling that portfolio for a third, it is a profitable business.
