Blackstone Group LP, 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 40 percent.

Bloomberg reported today that the firm is bidding against Goldman Sachs to buy 1,458 housing units from the city of Madrid. In July, Blackstone bought 18 apartment blocks from the city for €12.5 million ($173 million).

Higher yields and a belief that the euro-zone crisis has eased are drawing foreign investors back to the Spanish and Italian office markets, boosting national investment levels. So far this year, one large deal by Qatar Holdings in Milan has already pushed Italian investment volumes above their 2012 levels. In Spain, where the investment recovery has been slower, volumes in the second quarter were twice as high as volumes in the first quarter thanks to the high-profile deals by AXA Real Estate and Meyer Bergman, in Barcelona and Madrid, respectively.

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.

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.

New York-based fund giant Blackstone Group is buying 18 apartment blocks in Madrid for €125.5 million ($166.1 million), its first deal in Spain.

Municipal Social Housing Co. is selling the buildings, which include a total of 1,860 apartments, Bloomberg reports. Of the 1,860 apartments, 1,208 are rented to tenants and 652 are leased with an option to buy, Blackstone spokeswoman Cristina Garrido told Bloomberg.