Search Goldman Sachs Group Inc. Because a steady income brought her to an unlikely part of the world that was at the center of the financial crisis that rocked Europe a decade ago, according to the Wall Street Journal.

The Wall Street giant is investing between 150 million and 200 million euros in three beach resorts in Halkidiki, northern Greece, according to people familiar with the matter. The plan is to renovate the currently closed hotels and reopen them to guests within the next two years, company officials told the American newspaper.

Goldman bought the hotels in October and is funding renovations. According to sources familiar with its plans, the bank is looking for new properties – in Greece and elsewhere – and is developing a brand that could tie them together.

According to the Wall Street Journal, the investment is the work of the bank’s asset management division, which funded the deal with the same money as Goldman and the division’s clients. The deal, while relatively small, reflects the company’s desire for a steady income that could smooth out the troubles of its lucrative but volatile Wall Street business.

Goldman has a long history of dealing in distressed real estate in countries where economies are booming.

“Turn” in Greece

Despite being a member of the European Union for decades, Greece is often classified as an emerging market economy, according to the Wall Street Journal, due to the multi-year economic crisis that has hit the country. His companies tend to have a lower value than companies in Western Europe.

In recent years, however, investors have turned to Greece, in part because, according to a US newspaper, the right-wing government has embraced capital markets and foreign investment. Meanwhile, tourism broke new records last year. Real estate prices in major cities and resort areas are rising. In January, Fitch Ratings upgraded Greece’s rating to below investment grade. S&P Global Ratings did the same last year.

Goldman Sachs and Greece

Goldman has a complicated history in Greece. The Wall Street Journal writes that the bank’s reputation in the country has suffered after it emerged that a top executive had “fabricated” the numbers to help hide the country’s real debt. This “deal” earned Goldman commissions of up to $300 million, the American newspaper previously reported.

However, the bank never left Greece. In fact, in June, Goldman’s investment banking division opened its first office in Athens.

Goldman has previously invested in Greek real estate. The bank previously bought about 25% of the luxury resort group in an investment of around €400m led by Oaktree Capital Management. The companies sold their shares last year. Around 2018, Goldman tried – and failed – to buy a hotel in Athens overlooking the Acropolis.

Goldman is still working out the details of how it will monetize the three hotels it bought last year (Greek media has already reported on the deal). The bank is hiring mechanical engineers and architects and is building its own management team to oversee the project, people familiar with the matter said.

The hotels overlook the Aegean Sea, but they are far away from expensive islands like Mykonos and Santorini and the tourists who… crowd them. According to the publication, b.they are located close to each other in Chalkidiki, just over an hour south of Thessaloniki, Greece’s second largest city, and its international airport. The region is a popular tourist destination, especially among Europeans who prefer to visit Greece by road rather than by air.

Source: Wall Street Journal