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(Bloomberg) — Brookfield Asset Management has finalized a deal to buy a portfolio of rental housing from Blackstone Inc. for over €1 billion ($1.1 billion), the largest real estate transaction in Europe since the US and Israel launched their attack on Iran.
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Brookfield’s funds entered into a share purchase agreement to buy Fidere Patrimonio Socimi SA for a net price after taxes and adjustments of €1.05 billion, in line with the value at which Blackstone held the properties, according to statement late Monday. The companies own about about 5,000 apartments spread across 47 building in Madrid.
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Conflict in the Middle East has clouded the outlook for real estate’s ongoing recovery from the inflation wave of 2022. Bond yields — a key proxy for real estate valuations — have followed energy prices upwards since the attacks began but have recently retreated from their highs as traders weigh the impact of a growth shock on the economy.
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The spike in yields raised the risk that deals provisionally agreed before the outbreak of hostilities could collapse, as bidders weighed the impact of the conflict and the cost of financing acquisitions increased. But Brookfield pushed ahead with its bid, first tabled in January, even after the conflict escalated.
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Blackstone piled into Spanish property in the aftermath of the global financial crisis which ravaged the Iberian nation’s real estate markets. It followed up the acquisition of Fidere with deals to buy a majority stake in €30 billion of Banco Popular Espanol SA’s real estate loans in 2017, before acquiring landlord Testa Residencial SOCIMI SA the subsequent year.
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Jones Lang LaSalle Inc. and Eastdil Secured LLC, the real estate investment bank that’s being acquired by Savills Plc, advised on the sale of the portfolio.
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