25/11/15: Nama: That Gift Horse's Mouth...

Back in June this year, I posted about 10 most egregious cases of apparent mis-pricing of assets relating to Nama sales: http://trueeconomics.blogspot.ie/2015/06/17615-10-cases-worth-asking-nama-about.html

Now, we can add a new one. Per Irish Times report (http://www.irishtimes.com/business/commercial-property/blackstone-to-flip-blocks-for-43m-profit-1.2442098#.VlWtXj-TrWY.twitter):

“Blackstone, the world’s biggest private equity firm, is on track to make a profit of €43 million on two office buildings it bought in Dublin’s south docklands only two years ago. The company has agreed sale terms at €123 million for the Bloodstone Building and an adjoining block on Britain Quay – 54 per cent more than the €80 million paid for them towards the end of 2013.”

In other words, we have vulture fund that bough completed properties two years back and managed to squeeze 54% appreciation out of them by doing virtually nothing new, adding virtually no new value. And Nama added zero value to the buildings as well as it got them off Sean Dunne in fully completed form.

The cherry on the cake (for Blackstone) is that it bought the above buildings for roughly EUR100 million, along with a third building: Hume House on Pembroke Road in Ballsbridge. Blackstone is yet to sell Hume House. So Blackstone actual returns on Nama purchase will be going up and up.


The Irish Times article also references another Nama ‘deal’ for the taxpayers. “Early in 2013, King Street Capital bought the Bishop’s Square office building on Kevin Street for €65 million and last January it sold it on to Hines, the international property company, for €92.5 million – a price rise of more than 42 per cent.”

That would be the deal described here: http://costarfinance.com/2014/10/06/hines-in-pole-position-for-project-cherry-after-knockout-first-round-bid/


So between these two ‘deals’, Irish taxpayers have foregone collective EUR70 million. Thanks, Nama!

16/7/15: Nama: The Gift of Giving That Keeps on Giving...

While Greece is limping to its Bailout 3.0, our national heroes at Nama are busy fighting massive (California-sized) forest fires.

The Northern Ireland story (covered on this blog here) is refusing to go away:

1. An academic legal eagle exposition from the U.S. It's in NYTimes, which is on the 'radar' of all our development agencies (the folks that do have Good Minister's ear to whisper into).
2. And Irish News is covering the statement issued by Mr. Ian Coulter, the former managing partner of Belfast law firm Tughans. Sluggerotool.com covers same with extra details. Same covered in the Journal.ie piece here.
3. A good article from the Irish Times on Cerberus (the fund in the middle of Nama's Northern Ireland's case) and its use of Irish companies as vehicles for purchasing some EUR19 billion worth of assets. "Each of the Irish companies owns hundreds of millions, or in some cases billions, of euro in assets but has no employees in Ireland and in some instances, pays no corporation tax here. Cerberus has established at least 10 such companies in Ireland since it started its European property loan shopping spree in 2013, all of which appear to be owned by Promontoria, a Dutch fund that is 100 per cent owned by Cerberus Capital Management." 
4. Another person in the middle of Norther Irish deal - Mr. Frank Cushnahan was, it appears, a 'serial director' in "over 30 companies" according to this article in the Irish Times. Which, obviously, qualified him to advise Nama.
5. Deputy Mick Wallace went on to add to the story, claiming that Nama was aware of the suspicious aspects of transaction in the North, 'since January'. Nama categorically denied this.
6. The UK National Crime Agency will investigate Deputy Wallace's claims.

Meanwhile, back at the foot of this mountain of proverbial... err... at home in Dublin, revelations that our Government appointments to Nama posts could have been... surprise-surprise... political. Who would have thought this much?

There is a documentary trail now to prove that Nama was a party to Government-related discussions about 'fixing' the land market in the Republic. In this, the State's objective of attempting to control the supply of land for development and improve saleability of assets is uncovered and Nama cooperation is identified. Nothing like manipulating the markets as a direct policy objective, folks. We had, of course, back in June this year, Deputy Mick Wallace's allegations that Nama has some unorthodox dealings with the rental sector in Ireland, allegedly "a “cartel” of big property owners had driven up rental costs in Dublin" as “A small group of players now control a large chunk of the rental market in Dublin"... He also said Nama likes to sell properties in big blocks “that only investment funds, vulture funds, mostly from America, have the money to be buying”.

A good old article from Bloomberg archives covering another Nama deal fiasco. The deal was a dodo: Morgan Stanley bought about 220 million pounds of loans to West Properties for "about 65 million pounds ($103 million), or a 70 percent discount". Nama does not sell properties to parties connected to original developers... you know...

And to top it all, we have a new load of revelations from Mick Wallace, TD on further fun-under-the-sun relating to the Holy Grail of Irish Solutions to Irish Problems: the claim made under "Dáil privilege, ... a person in construction who wanted to exit NAMA and was asked to pay €15,000 “in a bag – in cash.”

Wallace also referenced recently the Chicago Spire case (covered earlier here in my compendium of 10 worst deals on Nama's record). A quote: "I would like NAMA to explain its approach when a bidder went to buy not the loans but the debt of the Chicago Spire, which was at $78 million plus costs which brought it to approximately $93 million. An investor sought to buy the debt, and this was every penny that was owed to the bank. This was not the reduced value, but the par value. In other words, this investor was prepared to pay the debt in full but NAMA gave it to Jones Lang LaSalle in New York to sell. This was a site in Chicago. Even if NAMA thought it could get more for it, it was not in New York that it would have got it. It would have been interesting if it had marketed it in Chicago. Why could NAMA not accept the debt being bought out? It is estimated that it was sold for $35 million. NAMA refused $78 million, plus the cost, and it accepted a figure in the region of €35 million. That was claimed to be in the interests of the taxpayer."

It is worth repeating that Nama has denied any wrongdoing in any of the above cases and has now requested that Gardai investigate Deputy Wallace's claims. All other players in the Northern Ireland saga also denied allegations.

Of course, when it comes to Nama asking Gardai to investigate N. Irish deal allegations and denying any knowledge of wrongdoing, without putting their intent and their denial into question, one might recall that Nama is fully aware of another wrongdoing relating to IBRC interest rate overcharging (as detailed and documented here: http://trueeconomics.blogspot.ie/2015/06/11615-full-letter-concerning-ibrc.html). But so far, Nama is in no rush to address the matter it has been notified about some ages ago (see details here: http://trueeconomics.blogspot.ie/2015/06/12615-anglo-overcharging-saga-ganley.html). Lest we forget, NAMA was the biggest buyer of the IBRC loans to which the interest overcharging applied, and, it is alleged (see here: http://trueeconomics.blogspot.ie/2015/06/1062015-bombshell-goes-off-on-anglo.html), this overcharging continued for loans transferred to Nama and still continues, despite the High Court Ruling of October 2014.