Lone Star, the Dallas-based private equity firm led by John Grayken, has bought loans associated with one of Dublin's best-located office blocks, 75 St Stephen's Green, for about €75 million. Bank of Scotland (Ireland), a subsidiary of Lloyds Banking Group, sold the loan quietly last week after receiving about five serious bids for it.
Pimco, the world's largest bond investor with $2 trillion (€1.5 trillion) of assets under management, and Madison International Realty, which manages more than $1 billion from global institutional investors, are thought to have been among the under-bidders. Lone Star bought the loan associated with 75 St Stephen's Green for between 80 and 90 per cent of its face value, reflecting the strong demand for blue-chip office blocks in Dublin.
Tenants of the Garrett Kelleher-developed building include Hedgeserv, Maples and Calder, Cantor and education company EMPGI. Despite the high-quality of the overall building, tenants have been troubled by air conditioning issues.
At least one tenant has written a legal letter to Grant Thornton, the building's receiver, to complain, and temporary air conditioners have been installed as a result.
Lone Star is led by John Grayken, an Irish passport holder, whose funds have made numerous investments in Ireland.
Lone Star Funds’ Irish unit invested at least $817 million in deals this year. Lone Star International Finance Ltd invested in “a number of deals” in the nine months through September, according to accounts filed with the Companies Office.
While the documents show a $2.8 million loss for 2012, the Dublin-based firm declared dividends of $5.1 million last year. Mr Grayken is raising money from investors to buy soured property loans and other assets as European banks seek to shore up earnings battered by the sovereign-debt crisis and tougher capital rules. The Irish unit invests in asset-backed loans, bonds and “other financial interests”, the filings showed.
The Irish unit had about $2 billion of assets at the end of last year, with declared dividends of more than $60 million since 2006.
– Additional reporting: Bloomberg
