BBVA recently announced the sale of their largest real estate portfolio in history: Project Buffalo. The entire portfolio was acquired by Blackstone and includes 3,500 assets that consist primarily of completed residential homes, storerooms, garages and retail premises worth a total of approximately €300m.
The properties included in the package have been foreclosed and were being held on the bank’s balance sheet. They are located mainly in Cataluña (28%), Andalucía (20%) the Community of Valencia (18%), Madrid (6%), the Canary Islands (6%) and Castilla-La Mancha (6%).
The major sale has marked the beginning of a new year that experts predicted will see the financial sector accelerate its real estate divestments as a whole. Not only of loans with collateral linked to properties, but also in the placement of large packages of finished assets, such as this most recent case.
BBVA engaged its Strategy and M&A team, led by Javier Rodriguez Soler to be responsible for closing the transaction under new regulatory requirements that have made bringing these types of portfolios onto the market far easier than before.
Two-thirds of BBVA's balance sheet consists of more than €20,000 million real estate-related assets and the remainder in loans, indicating the importance of undoing these positions. The bank's chairman Francisco González has refocused the entity's commitment to joining other players in the market as a way of de-consolidating these remaining assets. BBVA are currently taking advantage of the merger between Merlin and Metrovacesa and working with Santander and Popular to create a large bad land back to continue to start divesting its land.