Madrid's Biggest Landlord? U.S. Investment Firms

New York Times

25-04-2025

On a chilly winter night, a few dozen people gathered inside a graffiti-clad building in the Carabanchel district of Madrid. Nearly everyone was in the midst of a dispute with their landlord, but these weren't typical gripes about leaky pipes. They had come to commiserate about the American investment banks and private equity funds that controlled their homes.
Some at this meeting of the Sindicato de Vivienda de Carabanchel (the Carabanchel Housing Union) were fighting eviction orders or skyrocketing rents. Others had lost their homes through mortgage foreclosures. One attendee, Elsa Riquelme, described her yearslong battle to stay in the 600-square-foot apartment where she raised her three sons, which is now owned by Blackstone, the world's largest private equity firm.
She was far from alone: Over the past decade, Blackstone has become Madrid's largest private owner of residential real estate, and the second largest in all of Spain. Ms. Riquelme's apartment is one of 13,000 that Blackstone currently owns in Madrid, and among 19,600 it owns nationwide.
Across Spain, around 185,000 rental properties are now owned by large corporations, half of those by firms based in the United States, according to a review of property registries by the nonprofit Civio. Rental prices have increased 57 percent since 2015 and home prices 47 percent, according to PwC, in large part because the country has failed to build enough homes for its growing population, even as more than 4 million homes sit empty. After the pandemic pushed Spain's unemployment rate up to 15 percent, evictions nationwide spiked. In Madrid, tenant groups estimate that 20,000 renters in the city currently face the threat of eviction.
Ms. Riquelme, a bookkeeper by trade, emigrated from Chile in 2000 and bought her apartment for 56,000 euros during the housing bubble, making mortgage payments to CaixaCatalunya, a now defunct bank. After she and her husband split, she could no longer keep up, and the bank eventually foreclosed. CaixaCatalunya sought €150,000 ($170,000) in fees and mortgage arrears, then sold her apartment at auction for just €40,000 ($45,000) to a subsidiary of Blackstone.
What were once mortgage payments are now rent payments. And her ability to make those is under threat, she said, as rent-control provisions that allowed her stay on in the apartment at 550 euros a month have expired. She said she is resisting Blackstone's push to double the rent.
'This is my neighborhood. My kids went to school here,' said Ms. Riquelme, 60. 'Now I wake up every day wondering if Blackstone is going to push me out on the streets.'
Ms. Riquelme's apartment was one of 400,000 private units across the country bought a decade ago by three American equity firms: Blackstone, Cerberus and Lone Star. Blackstone oversees at least 27 different domestic subsidiaries and investment funds in Spain that use a variety of models to buy both private and public housing. Some funds have focused on buying foreclosed residences, often converting entire buildings into short-term rentals. Others have scooped up public-housing units from cash-strapped city governments and then privatized them. Still more bought up homes as the government cleared its books of troubled assets after nationalizing several banks amid the Eurozone debt crisis.
'There was a collision between the collapse of homeownership, distressed assets, and a push from the European Commission to sell public debt,' said Jordi Bonshoms, a researcher in the law department at Barcelona's Pompeu Fabra University.
For Blackstone, it was an expansion of a real estate plan that took root in the wake of the 2008 housing crash, when it and other Wall Street firms spent billions buying up properties across the United States. When values rebounded, the equity was transferred from homeowners to the corporations and their shareholders.
In 2013, Madrid's city government sold 5,000 public-housing units to Blackstone and to another American investment bank, Goldman Sachs. Blackstone bought 1,860 apartments in 18 complexes for €128.5 million ($146 million) — including hundreds of units in the PAU development in Carabanchel. That amounts to just €69,500 (about $78,000) per unit, on average.
A court-mandated audit of the deal later revealed that the sales were made at well below market rates. Madrid's then-mayor, Ana Botella, along with seven others, was ordered to pay €26 million in penalties for mismanaging the sale. The fine has since been overturned on appeal, but the Goldman Sachs ruling stands, though it has been difficult to implement as many of the apartments in question have already been resold.
These days, just 2 percent of Spanish homes available for rent are public housing, according to the Organization for Economic Cooperation and Development. In France it's 14 percent; in the Netherlands it's 34 percent.
Many of Ms. Riquelme's neighbors were caught up in the 2013 privatization wave, including Carmen Robledo and her husband, Francisco. Blackstone bought the Robledos' building in 2013, and their public-housing rental contract ran through 2016. They then signed a three-year lease with comparable conditions. When that ended, Blackstone looked to raise the rent 40 percent, with escalations built into the contract each year after, said Ms. Robledo, a custodian at a local elementary school. The couple finally lost the apartment in February 2024.
They now share a 590-square-foot apartment with two roommates. But Ms. Robledo, 64, still visits her old home. Pigeons, accustomed to Ms. Robledo feeding them in the afternoons, continue to gather on the balcony. 'I need to keep coming,' she said.
A spokeswoman for Blackstone, Sneha Patel, said that the company has honored all preexisting housing contracts, and that when those leases end, 'the tenant could either purchase the property or continue to rent the property at market rent levels.'
'We have no ability to impact the overall market or rents,' Ms. Patel said, noting that the company owns less than 0.12 percent of Spain's total supply and has invested €180 million (about $204 million) in improving the properties it does own. 'As is well evidenced, the challenges in the Spanish housing market can only be solved by building more housing.'
But Carme Trilla, the former director of housing policy for the Spanish region of Catalonia, said that many of the investment funds that benefited from post-crisis foreclosures are now also evicting renters. 'We have a situation where there are multiple evictions for the same family,' Ms. Trilla said.
During a policy speech in January, Prime Minister Pedro Sánchez called out the role of 'speculators' and 'so-called vulture funds' in distorting the market, which he said has led to 'the increased use of housing as a financial asset.'
Making matters worse for many homeowners was the lack of legal protections, like the inability to make properties themselves collateral for mortgages. In the post-crisis years, lenders often repossessed properties for unpaid mortgages while insisting the borrower pay off the balance of the loan. Spain's Socialist Party-led coalition government placed a moratorium on foreclosing on households classified as 'vulnerable' through 2028 — though vulnerability is judged on a case-by-case basis.
Recently, the government proposed a 100 percent tax on home buyers from outside the European Union. But this would not apply to international companies that operate through local firms, including Blackstone, which works through its domestic subsidiaries.
'It's not that the market is not regulated,' Dr. Bonshoms said. 'It's that it has been regulated in a way that benefits corporations.'
Though Blackstone's properties are concentrated in Madrid, it also owns around 2,500 apartments in and around Barcelona, which has been a bastion of progressive housing policies in recent years. The city is poised to phase out short-term rentals by 2029, and its government is allowed to match any offer on the sale of a residential building, then convert the affiliated apartments into public housing.
One Blackstone tenant in Barcelona, Enric de Orta, has lived in the Sant Antoni neighborhood for most of his life. As pandemic-era rent caps lapsed and his lease expired, he saw his rent rise from €850 to €1,400 a month ($960 to $1,600), which he refused to pay. He has been fighting in court with the help of his housing syndicate.
'I can't understand how my neighbors in this building complain — and they are complaining — but they don't take any action at all,' he said. 'That really bothers me. Even when you go to demonstrations, you see that we are not enough.'
On a recent visit to Mr. de Orta's building, seven of 19 apartments on his floor appeared vacant. The landlord had installed steel security doors to prevent squatters from occupying empty apartments.
'Any suggestion that we leave rental properties deliberately vacant is false and misleading,' Ms. Patel of Blackstone said. 'Properties are only ever vacant in between re-leasing or while being renovated.'
Back in Madrid's Carabanchel district, the tenant union meets most Thursday evenings. On a recent night, syndicate veterans debriefed 13 first-timers to learn their situations. Cheers broke out as one member, Victoria Rivera, recounted how her son, now grown, had just bought the apartment that the family had lost in foreclosure when he was a child. The seller was Divarian, a Cerberus subsidiary.
'We fought for 15 years,' she said, sharing chips and soda to celebrate.
The syndicate wants to halt all evictions in its neighborhood, said Natalia Tapia, 27. Along with affordable rents, they seek renovations to buildings and apartments, with many tenants complaining of lax upkeep. Perhaps most significant, the group wants to negotiate with corporate landlords as a collective, not as individuals.
'This is not some NGO,' Ms. Tapia said. 'This is people fighting to change the rules.'