REAL ESTATE funds have been working on accelerating the sale of their portfolios, for as soon as the market reopens, they will be forced to apply price adjustments ranging from 15 per cent to 50 per cent.
Undoubtedly the coronavirus crisis will cause a paradigm shift in the Spanish real estate market. The large international funds , which in the previous crisis funded massive purchases of portfolios from the banks, reversed the sales policy that they had until now and, due to the economic crisis that the coronavirus has brought. Now these funds find drastically adjusting prices and speeding up divestments a much safer bet in these times of uncertainty.
According to various sources involved, these funds are already working to launch several real estate portfolios onto the market, a decision they want to enact as soon as the state of alarm ends and execute, hopefully in the summer, with the idea of being able to close the agreements before autumn.
In order to achieve this level of speed, they are willing to drastically adjust prices, which will entail puncturing the bubble that they themselves had created and that throughout 2019 made it difficult to close operations, since aspirations of sellers were well above the offers of buyers.
An example of this imbalance was carried out by market leader, Blackstone, who, both in offices and in homes, renounced their intentions to sell large lots. To achieve this high price expectation, they chose to withdraw them from the market and chop. Now, both the American giant and the rest of the players in the market – Cerberus , Bain , Lone Star … – are aware that the tables have turned and it is time to activate the sales button.
“The markets are closed until July but advisers are cleaning and preparing ‘data tapes’ to launch portfolios as soon as it opens, both NPL [loans] and REO [assets]”, acknowledges a large investment fund which asks for safeguard anonymity. On the other hand, these companies will find opportunistic funds that have once again flown over for the Spanish market, attracted by the call of an economic crisis.