NAMA has selected Kennedy Wilson, Lone Star, Starwood Capital and a joint bid from York Capital Management and D2 Private to progress through to the second round of the €373m Project Holly Irish non-performing loan portfolio sale, CoStar News can reveal.
The shortlist is notable by the absence of Anchorage Capital, the New York-based hedge fund which prompted the assembly the Project Holly NPL through its reverse-enquiry prior to the summer.
Anchorage’s bid was in partnership with Sean Reilly, the Irish property developer and investor whose investment and development loans make up Project Holly.
This is the first time that the initial bidder, which prompted the assembly of the loan portfolio through direct inquiry with NAMA, has not been selected through to the second round.
Whether the reason for Anchorage Capital’s exclusion was purely based on price or because NAMA did not want another borrower-led bidding partnership winning another of the bad bank’s commercial property loan portfolios is, for now at least, unclear.
While Kennedy Wilson, Lone Star and Starwood Capital have all been early movers seeking to capitalise on the nascent recovery in Irish commercial property markets, through direct and loan purchases, York Capital Management is a new name to the fray.
However, CoStar News understands that York Capital Management, which counts Credit Suisse among its underlying investors, was the underbidder to Lloyds Banking Group’s Irish residential mortgage loan pool, Project Phoenix, which traded to Apollo Global Management for £257m last Friday.
D2 Private, founded by Deirdre Foley in 2005, just completed the end of its disposal programme last month, with the sale of Waterside, Marks & Spencer’s global headquarters in Paddington for £207m to a four-strong Korean consortium which was revealed first by CoStar News (see here).
Project Holly is comprised of 28 commercial property investment and development loans all lent to Sean Reilly’s McGarrell Reilly Group, including around 40 assets, such as:
- the Watermarque Building, Bridge Street & South Lotts Road, Dublin 4;
- CityNorth, a 100-acre mixed-use commercial development, comprised of office blocks and a hotel, CityNorth Hotel, the four-star 128-bed hotel in Gormanston, Dublin.
- the 210,000 sq ft Iveagh Court Complex, the five-block business and residential complex at the junction of Harcourt Road and Charlemont Street with current tenants including Mercer, Central Bank of Ireland, Hewitt, Office of Public Works, Skandia Global Funds as well as the Ireland embassy offices of Denmark and Estonia;
- Marsh House, 25/28 Adelaide Road, Dublin 2, which is the Irish headquarters for March, the global insurance broking and risk management firm.
- 11-12 Hogan Place, Dublin 2, four-storey office block close to Merrion Square and south Docklands.
NAMA’s widely-stated policy for the assembly of loan portfolio is based upon reverse-enquiries.
It was the Starwood Capital-led consortium which triggered the creation of the €810m Project Aspen loan portfolio, which Starwood ultimately won, while Patron Capital’s reverse inquiry on the Eamon Duignan loans led to the assembly of the €250m Project Club, which CoStar News understands has gone preferred with CarVal Investors (see below).
Cushman & Wakefield Corporate Finance is selling Project Holly for NAMA.
CarVal Investors closing in on near €70m deal to buy Project Club
Meanwhile, CarVal Investors has been selected as the preferred bidder for the €250m Project Club Irish non-performing loan portfolio, and is expected to pay around €70m, CoStar News understands.
Underbidders on Project Club included Patron Capital and Castlelake, which is the rebranded TPG Credit. CarVal Investors’ winning bid is expected to include a minority equity stake in Project Club by Pepper Asset Servicing, the loan servicing, asset management and advisory firm.
NAMA’s protracted sale of Project Club, first mooted back in January, was delayed in part by the Irish bad bank’s keenness to close the €810m Project Aspen to a Starwood Capital-led consortium in May.
Project Club is comprised of a series of retail properties and development sites within the commuter belt of Dublin. All the loans, which are thought to number less than 10, are past due.
CBRE managed the sale of Project Club.
NAMA is also currently selling two Dublin direct property portfolios: the entire Central Park scheme, the suburban office park on the outskirts of Dublin City centre formerly owned by Treasury Holdings, and the €120m Platinum Portfolio, a five-strong Dublin city centre office portfolio.
Next year, NAMA is planning on bringing up to €1bn in Irish direct assets and loans. “We are looking at bringing an extra €1bn of Irish assets to market in 2014,” Brendan McDonagh, Nama’s chief executive, told the Financial Times yesterday.
Anchorage Capital was expected to have bid on Friday for the legacy Anglo Irish Bank corporate loan to Arnotts, Ireland’s 170-year old department store, which is up for sale a standalone tranche inside the IBRC Project Evergreen corporate loan book.
The legacy Anglo Irish Arnotts loan is €140m, which is a 50% stake of the entire €280m total unpaid loan balance.
RBS’ Ulster bank owned the remaining €140m Arnotts, which was acquired at a discount by Fitzwilliam Finance Partners Ltd, an investment company led by solicitor Noel Smyth, according to the Irish Times on Friday.
Noel Smyth’s Fitzwilliam is expected to have competed with Anchorage Capital, and others, for the IBRC Arnotts loan.
All parties declined to comment.
CoStar Finance 