Cocaine Trafficker Properties for Sale in a $366 Million Auction

(Bloomberg) -- A $366 million portfolio of 5,000 properties seized by the government of Colombia in criminal cases will be put up for auction, according to the Debt Exchange, the Boston-based firm managing the sale.

The real estate represents the largest block of assets auctioned by Colombia, said Kingsley Greenland, chief executive officer of the auction firm, known as DebtX. The country is working to attract international investors and dispel its reputation as a haven for cocaine cartels and rebel militias, whose former properties are among the assets now in government hands,

“These assets were seized in conjunction with illicit activity,” Greenland said in an interview. “That could range from not paying your taxes to the more interesting TV stuff that you see.”

Most of the properties are residential or development opportunities, with about 28% in the Bogota area and 39% in the Valle del Cauca province and its capital city, Cali. The five largest assets represent almost a quarter of the value of the portfolio, which will all be auctioned as a single package. None are as flashy as the diamond-encrusted Rolex watch once owned by drug lord Pablo Escobar that the government auctioned in 2013.

Proceeds from the sale will go to the Colombian Fund for Rehabilitation, Social Investment and Fight Against Organized Crime.

DebtX, which primarily serves as a secondary marketplace for U.S. real estate debt, was chosen to run the auction through a government screening process. It has been active in Latin America since 2010, selling more than $1 billion in assets for public and private institutions in countries from Argentina to Mexico.

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