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darwin

Europe's Biggest New Landlord: Wall Street

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via Reddit:

Europe's (Ireland and Spain's) Landlord: Wall Street

Quote

The Tobun family never missed a rental payment on their modest brick rowhouse in eight years. But in February, the couple, who have two young children, received a letter warning that they would be evicted when their lease expired. Forty of their neighbors got the same notice.

When they went to investigate, the tenants, in the working-class suburb of Tyrrelstown, discovered a trail that led all the way to Wall Street.

After Europe was ravaged by a financial and economic crisis, the giant investment bank Goldman Sachs snapped up huge swaths of distressed debt in Ireland, including the loans of Tyrrelstown's developer in 2014. The developer now wants out of the rental game and is selling the properties. As the owner of the loans, Goldman will reap a large portion of the proceeds...

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...Wall Street has become the biggest new landlord in Europe, as American financial firms have swept into cities, suburbs and towns to take advantage of the fallout from the worst economic downturn since World War II. In the last four years, Goldman Sachs, Cerberus Capital Management, Lone Star Funds, Blackstone Group and others from America have bought more than 223 billion euros' worth of troubled real estate loans around Europe, nearly 80 percent of the total sold.

The firms have made the usual calculation: buy distressed investments on the cheap during tough times, betting that the outlook will eventually turn and riches will follow. And the firms are paying little or no tax, by employing complex strategies that often involve subsidiaries with no operations or staff.

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13 minutes ago, darwin said:

Reported in November that one of the firms mentioned in the article (Cerberus) are amongst those bidding on the Mortgage Express BTL mortgages that went into UKAR when B&B caught a bullet.

Quote

US private equity houses Blackstone and Cerberus are also believed to be vying for B&B portfolio, which is mainly comprised of buy-to-let mortgages. Cerberus bought £13bn of Northern Rock loans sold by UKAR in 2015 and then want on to offload £3.3bn of the assets to TSB.

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Edited by Bland Unsight

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26 minutes ago, bear.getting.old said:

I still think that the forthcoming crash will make the last one look like a chimps teaparty.

Better believe it. ;)

No meaningful private sector deleveraging anywhere since 2008.

 

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