The National Asset Management Agency yesterday confirmed the sale of an €810 million portfolio of loans related to Irish property developer David Courtney to a consortium of investors led by US-based Starwood Capital Group.
It is understood that the deal, which was revealed in The Irish Times yesterday, involves the consortium paying €195 million for the portfolio. This represents a discount of almost 76 per cent.
Nama will sell the loan portfolio to a joint venture entity, which will be 20 per cent owned by Nama and 80 per cent by a consortium comprising Starwood, Dublin-based adviser Key Capital Real Estate and Catalyst Capital in the UK. This will allow Nama to share in any future upside that might accrue from the transaction and reflects the view that the commercial property market here is on the turn.
Vendor finance
In addition, Nama will provide a vendor finance to the joint venture, with an initial loan to value of less than 60 per cent. This loan is to carry a "commercial rate of interest", and is expected to be repaid within five years.
The loans were originally acquired by Nama from four Irish institutions, including Bank of Ireland, Anglo Irish Bank and AIB.
The sale process was handled by Eastdil Secured and began in February, initially attracting more than 60 expressions of interest. Nama began exclusive talks with the Starwood-led consortium in early April.
The portfolio comprises 30 properties, mostly located in Dublin. This involves six shopping centres, 12 office buildings and six industrial units.
These include some residential and development sites.
It is understood that Mr Courtney will advise the Starwood consortium for a fee for a period of up to six months to assist with the transition of the loans to the new ownership group.
Advisory role
Nama protocols prevent the original owners of assets or loans that are non-performing from buying them from the State agency. Nama is believed to have no issue with Mr Courtney's short-term advisory role in this process.
Nama chief executive Brendan McDonagh said he was “very happy” with the outcome of the loan sale process.
“We welcome Starwood to partner with us in resolving the portfolio. The transaction has a number of innovative features, including Nama vendor financing and equity participation,” Mr McDonagh said.
Jeffrey Dishner, senior managing director at Starwood, said he was "excited" by the investment opportunity.
