Blackstone Group LP, the largest manager of private-equity real estate funds, agreed to buy a group of Madrid apartments for 125.5 million euros ($166 million) in its first property purchase in Spain.
Blackstone, based in New York, is acquiring 18 apartment blocks with a total of 1,860 units from the city of Madrid. Of those units, 1,208 are rented to tenants and 652 are leased with an option to buy, according to an e-mailed statement from Cristina Garrido, a Blackstone spokeswoman.
Europe’s biggest real estate managers are making their first investments in southern Europe since the financial crisis as low prices and diminishing risk make commercial properties more attractive. Blackstone also is bidding for 3,000 rental units being sold by the regional government of Madrid.
“We believe strongly in a recovery of the Spanish economy,” Garrido said in the statement. Blackstone said it’s required to honor the existing terms of all tenant and building agreements. The firm has invested in similarly regulated housing in Germany, San Francisco and New York, she said.
The apartments in the Spanish capital were the property of the Municipal Social Housing Co. and are located in the districts of Carabanchel, Vallecas and Villaverde and the city center, Blackstone said.
The company in April agreed to sell 6,900 apartments in Berlin to Deutsche Wohnen AG, Germany’s second-largest residential landlord by market value.
Blackstone is increasing purchases of apartments, an area where it has been less active than in other property types. It’s the largest U.S. owner of hotel rooms and the second-largest office landlord, according to National Real Estate Investor. Blackstone also has extensive industrial holdings and is the biggest buyer of single-family houses in the U.S., investing about $5 billion to acquire about 30,000 houses to rent since the beginning of 2012.