No one is safe from being trapped by the Madrid of skyrocketing real estate prices. Not even an entire autonomous government. At the end of 2025, the Generalitat of Catalonia had to say goodbye to its historic headquarters at Alcalá, 44, next to the Bank of Spain and the Círculo de Bellas Artes. The insurer to a group of Mexican investors with the initial project of building a luxury hotel. Stripped of this landmark, the Government representation moved to a much less emblematic place, Orense Street in the Tetuán district, where it now pays a rent of 64,945.95 euros per month, according to data obtained by EL PAÍS in application of the transparency law. However, the real estate odyssey of this institution does not end there: the competition it launched to buy a headquarters in the center of Madrid, and thus save costs, has been abandoned. to acquire the 2,500 square meters that the Generalitat wants in the VIP area of the capital (Central district or neighborhoods of Recoletos, Goya, Lista and La Castellana). In Madrid, the price per square meter is quoted as if the bricks were gold.
“Madrid has a growing attractiveness as a corporate center and large luxury hotel chains compared to other European cities, and that makes owners expect higher prices,” analyzes Carlos Balado, researcher at OBS Business School. “Hence, many operations are not closed and transactions are reaching unprecedented levels, with returns of around 7%, very high compared to other assets such as public debt,” he adds. – And he emphasizes that the problem is not so much in the offer presented (“”), but in market expectations. For now, sellers always want (and get) more.
The story of the Catalan delegation in the capital perfectly highlights the rise in real estate prices that is plaguing Madrid. It’s been 20 years in the same emblematic place, a few blocks from Congress. Two decades that draw a skyrocketing graph, from rent paid to rent paid until totaling more than 15 million euros: if it were a fever, that patient would be on the verge of death.
In 2005, when it moved its headquarters to Alcalá Street, the Generalitat began paying 379,514.88 euros annually for the premises where the Blanquerna cultural center-bookstore has been located for 20 years. The last invoice for that same rental was 548,208.51 euros. 44.45% more. The same thing happens with the floor that housed the institutional offices: it went from costing 181,027.84 euros in 2006 to 359,741.68 two decades later. An increase of 98.72%. In short, the total expenditure on rentals for the different services offered at the headquarters, which has been adding floors and proposals over the last two decades, went from costing 379,514.88 euros in 2005 to 1,102,544.5 in 2025. An expense that only stopped when a group of Mexican investors decided to buy the building () to turn it into a luxury hotel.
The Government, therefore, did not have the option to renew the contract, as explained in the Madrid delegation, to which the Generalitat refers. In 2025, like any tenant facing an investment fund, he had to say goodbye. If Madrid suffers a bubble focused on the luxury real estate business, Alcalá 44 is at its epicenter. And the Generalitat of Catalonia is now its victim: it wants to buy a headquarters, but the market does not offer it for the desired price.
“The contest has been abandoned due to a clear misalignment between the conditions proposed and the reality of the real estate market in these enclaves,” reasons Alejandro Navas, spokesperson for Licitaciones.io, a search and monitoring company for public bidding companies. “In these types of locations, owners usually have more profitable and flexible alternatives, such as selling to institutional investors, converting to luxury residential, or long-term rental, which raises their expectations and reduces the attractiveness of operations subject to rigid conditions,” he adds. But the difficulties, this specialist adds, went even further in the case of the Generalitat: “The tender excluded the participation of intermediaries, which further limits access to opportunities.” off marketvery common in this segment. Furthermore, the lack of a fully consolidated budget item () introduced an element of uncertainty that discourages owners, especially in complex administrative processes.”
Vanessa Gevers, CEO of VGevers Capital Market, explains that not all properties allow changes or flexibility of use to adapt to what the Generalitat is looking for, either due to urban planning limitations or technical conditions such as the configuration of the floors, the structure or the degree of protection. For example, the Government needs a large space at street level for its cultural center. Therefore, the available options are further reduced.
“The office market in the business district of Madrid is very tense on the supply side,” he portrays. “The availability in these areas is less than 3%,” he adds about a market fueled by strong demand, with more than 500,000 square meters contracted in 2025, and by the destruction of stock. “The conversion of offices to residential and hotel uses, especially in the center, together with the absorption by the educational sector, is significantly reducing the available supply,” says Gevers.
Plan b of a reform
This specialist assures that the situation is pushing rents upwards – with the highest levels stabilized between 40 and 50 euros per month per square meter. That creates a snowball effect that drags and multiplies sales prices. To top it all off, says Gevers, the Generalitat is targeting areas of Madrid that are especially complicated: “Barely a building comes on the market every two or three years, and when it does, it faces strong competition from both local and international investors willing to pay higher prices, either to maintain the use of offices or to transform it.”
The Generalitat is very clear about what it wants. Look for a building of between 2,000 and 2,500 square meters to locate the offices of the delegate and the Government and the administrative offices; the Blanquerna Cultural Center-Bookstore (which includes an auditorium with capacity for 150 people); plus six optional parking spaces. At the same time, it is proposed that the property has a residential space of between 85 and 105 square meters that includes a suite-type room with a bathroom, as well as another bathroom, a bedroom, a living-dining room and a kitchen. The apartment can be within the property or, at most, at a distance of 250 meters. But .
How to solve the problem now and achieve a proprietary headquarters in this crazy Madrid? The Generalitat does not rule out opting for a property that is cheaper than expected, but that requires a thorough renovation. The clock is ticking: the lease for the Orense Street headquarters expires in March 2029.
