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The Spanish press reports that Morgan Stanley are going to liquidate a commercial real estate fund in Spain by auctioning 3 shopping centres in Alcalá de Guadaira (sevilla), el Mirador in Cuenca, and Centro Almazora, in Alcoy (Alicante). Once sold they will close their real estate fund called MSREF.
According to press reports they expect to sell for €20-30m, having bought in 2006 for €120m. Potential buyers are mainly foreign funds, some with no experience in Spain 😯 Morgan Stanley will also have to provide the buyer with financing.
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If Spanish banks followed Morgan Stanley’s example, they would also offer their repossessed properties for sale at 25% of the 2006 prices, and supply finance to the purchasers.
But they can’t and won’t, it would make a mockery of their real estate valuations, on which their finance requirements from outside sources are based.
Catch 22 doesn’t even explain it fully, and the only realistic answer is immediate bankruptcy. But that won’t help anyone, especially the can-kickers in Brussels.
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