Lone Star wins NAMA’s Project Holly loan portfolio paying around €220m

Lone Star has won NAMA’s Project Holly Irish non-performing loan portfolio paying around €220m and reflecting a circa 41% discount, CoStar News can reveal, as competition among private equity investors to deploy capital into Ireland’s fast-recovering market gathers momentum.

Lone Star logoNAMA selected Lone Star as the winner yesterday which, in turn, could pave the way for Blackstone to win the hotly-contested Central Park portfolio at the end of this month, with the two rival global private equity firms understood to have been the highest bidders in the first round, CoStar News understands.

Lone Star fended off competition from three other finalists – Kennedy Wilson, Starwood Capital and a joint bid from York Capital Management and D2 Private – as revealed by CoStar News on 9 December.

The nominally-valued €373m Project Holly is comprised of 28 commercial property investment and development loans all lent to Sean Reilly’s McGarrell Reilly Group, secured by around 40 assets.

Anchorage Capital, the New York-based hedge fund, approached NAMA prior to last summer about acquiring the loans, which triggered the Project Holly loan sale process, and then teamed up with Reilly in a joint venture bid.

However, Anchorage Capital and Reilly’s bid failed to make it into the second and final round on price, which was 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.

Major assets in Project Holly include:

  • 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, a four-storey office block close to Merrion Square and south Docklands.

Ireland’s commercial property market last year saw €1.78bn in transaction volumes which rose to around €2.5bn including loan portfolio sales, according to CBRE, with the property services firm predicting an even larger transactional flow this year.

Cushman & Wakefield Corporate Finance is selling Project Holly for NAMA.

Final bids for NAMA’s Central Park are due in next Wednesday, 29 January, with the two tops bids from the first round understood to be Blackstone and Lone Star, while the top price was €262m.

The five-strong finalists, as revealed by CoStar News on 9 January, also included joint venture bids by Oaktree Capital Management and Patrizia; Apollo Global Management and Clancourt Group; as well as a three-strong consortium bid by Green REIT, PIMCO and Kennedy Wilson.

Blackstone and Google shared the spoils on NAMA’s Platinum portfolio for a combined sale price of €165m, which CoStar News was also first to reveal on 6 January.

All parties declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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