US investment group Colony Capital has bought about €80 million of loans advanced to developer Johnny Ronan, which were used to purchase a prime site in Dublin 4 that is earmarked for Facebook's new international headquarters.
Buying the loans secured on the site, adjacent to AIB's Bankcentre headquarters in Ballsbridge, puts Colony in prime position to fund the estimated €200 million build-out of a new 330,000sq ft scheme, known as Fibonacci Square. Global social media giant Facebook is believed to be on the verge of signing on as its sole tenant.
It is understood that Facebook is in advanced discussions to consolidate all of its Dublin operations on to the Fibonacci site being developed by Mr Ronan and Colony Capital, and also the next-door Bankcentre, a sprawling campus separately owned by private investors.
Market sources said an announcement on a deal for Facebook to move to Ballsbridge was “imminent”. It will eventually lead to it adding more than 1,500 jobs in Dublin, bringing the total close to 4,000.
It is understood from several sources that Colony has concluded a deal to buy out the senior debt and mezzanine loans secured on Mr Ronan’s development site. It has purchased the €50 million worth of senior loans from US-Singapore outfit, Jefferies LoanCore. The cash was originally advanced to Ronan Group Real Estate (RGRE) in 2015 to help fund the site acquisition.
Colony has also acquired an estimated €30 million of mezzanine financing advanced to RGRE by a fund run by Cardinal Capital, a specialist finance house based in Dublin. Cardinal also separately operates an Irish SME fund.
Mr Ronan's development company was advised on the transaction by law firm Eversheds. Cardinal was advised by Beauchamps, while Colony was represented by London firm Hogan Lovells.
Proposed campus
RGRE and Cardinal declined to comment on Wednesday, while Colony was unavailable to speak about the transaction.
Colony, which previously backed Mr Ronan’s exit from Nama and is working closely with the developer on other major schemes, now has a substantial interest in the new-build Fibonacci part of the proposed Facebook campus.
In addition to buying the RGRE loans, it is understood Colony has taken a sizeable equity stake in the deal by buying out the Fibonacci interests that were held by Siobhán Quinlan, wife of property financier Derek Quinlan.
It is thought likely that Colony will now take a lead role in providing the Fibonacci development financing to RGRE, although it could syndicate some of the debt to other institutions and investors.
Market sources said the firepower of Colony, and its prominent interest in Fibonacci, will lend weight to RGRE’s efforts to close out a deal with Facebook.
Mr Ronan’s scheme involves flattening a number of old office buildings on the site, which is opposite the main hall of the RDS.
He will then construct a large office development for Facebook in their place, with a nearby sunken plaza also slated for Fibonacci Square. Market sources said that demolition work is due on to begin imminently.
Enniskerry-based Mr Ronan is among only a handful of major Irish developers to have re-emerged from the wreckage of the last property crash and recession.
With backing from Colony, he is building a major new office scheme in Dublin’s docklands at Spencer Place.
It is understood he is close to concluding a deal there with US cloud computing giant Salesforce. It will see the web company take on about 400,000sq ft of space, enough for 4,000 staff.
Colony also backed Mr Ronan on an office scheme at Burlington Plaza in Dublin, where tenants include ecommerce giant Amazon.
