As we have seen in the past four years, all good things come to an end with the Celtic Tiger de-clawed and passed out on the floor, property values collapsed despite the enormous distortions still in place and the banking sector still in retreat. Developers have seen their wealth wiped out on paper, and oftentimes in the wallet also.
But just as night turns to day, so also do bad things come to an end. Two weeks ago, €1bn-indebted NAMAed developer, John Fleming emerged from bankruptcy in the UK. No word yet on plans for the 61-year old Cork man but with his experience in property development, energy and other sectors, he is likely to be a man in demand.
The Grehans, Ray and Danny, have been associated with companies which are now bidding for former Grehan assets foreclosed by NAMA.
But it is the UK’s Property Week (subscription required, but adequately re-reported with appropriate accreditation for once by the Irish Independent today ) which confirms that developer, Donal Mulryan, is now “set to be” employed by Morgan Stanley which has a huge property portfolio under management including, reportedly, some of Donal’s properties, the loans on which were recently, again reportedly, acquired from NAMA.
It was 8th October 2011 when Bridget O’Connell at the UK’s Estates Gazette (not available online without subscription) reported that Donal Mulryan’s UK GBP 220m (€257m) portfolio of property was to be put on the market by Donal under NAMA’s auspices. Savills was named as the company appointed by Donal to sell the portfolio of mostly residential developments in the North West of England (Manchester is where Donal’s main vehicle, West Properties, is centred) but also a site close to London. It now seems that NAMA is to sell the underlying loans to Morgan Stanley for GBP 65m (€76m) according to Property Week. And Donal is said to be “set to be” engaged by Morgan Stanley in a management role for which he will, reportedly, be paid a fee. What sort of fee could Donal expect for managing GBP 65m of assets (worth GBP 220m originally)? Difficult to say but with performance bonuses, I would have said the mid to high hundreds of thousand pounds per annum.
NAMA, Donal and Morgan Stanley are not commenting on the reports. Donal is the brother of Sean Mulryan of Ballymore fame which the Independent today claims is “the largest debtor in NAMA” Donal at one time was involved in Ballymore but for the last decade has been developing property on his own account, and was said to have been worth €1bn at the height of the boom.
So there may be life for developers after NAMA. I’d guess that in the short term, there will be consultancy roles aplenty as cash-laden investors chase after loan and property portfolios, and who better to guide their efforts than the former owners or at least developers who would be familiar with the portfolios. For most developers it will perhaps take longer to build independent wealth based on their core skills in property development, most are broke and sources of finance are like hens teeth. There will be exceptions, Treasury China seems to be doing roaring business and Ballymore itself is continuing to develop London’s Docklands, but for most developers, consultancy and fee income looks like the best they can achieve in the short term.
Of course they need extricate themselves from NAMA first which is not straightforward.
NAMA Wine Lake 
2 things on this – it was a bubble, not a boom, and he obviously was using leveraged plays, so any bubble-estimates of his wealth/leveraged-debt is spurious at the very least – just ask Seán Quinn!
They should have been dealing with “Yuri from the Urals” in relation to their debts – NAMA is a pussy compared to what their alternative was.
They could do with a fresh set of eyes around that place,he must not had have a lot of negotiating strength,managing director or partner is where it’s at.
Looks like some sort of ‘vendor’ role.Good for him getting back out there,not much point sitting at home crying into your cornflakes,probably needs hire a few people too.That amount of assets too much for one individual to professionally and competently manage,MS has fairly stringent reporting requirements.
“Morgan Stanley has told investors in its $8.8 billion real-estate fund that it may lose nearly two-thirds of its money from bum property investments, according to fund documents reviewed by The Wall Street Journal.”
“That would likely make it the biggest dollar loss—$5.4 billion—in the history of private-equity real-estate investing. Over the past 20 years, Morgan Stanley’s real-estate unit was one of the biggest buyers of property around the world, doing some $174 billion in deals since 1991, mostly with money raised from pension funds, college endowments and foreign investors. The losses come from investments in properties such as the European Central Bank’s Frankfurt headquarters, a big development project in Tokyo and InterContinental hotels across Europe, among others.”
http://online.wsj.com/article/SB10001424052702303695604575182022093645864.html
“Morgan Stanley (MS) has achieved a record of sorts, but not the kind of record anyone wants. It has admitted losing billions for its investors in the Morgan Stanley Real Estate Fund VI. Unfortunately, there is another twist in this sorry tale that I will get to in a moment. But first, let’s get a sense of how the biggest dollar loss in private equity real estate happened”
http://seekingalpha.com/article/198604-morgan-stanley-s-real-estate-fund-vi-what-went-wrong
Donal had one huge advantage here – his portfolio was in the UK. There are banks in the UK. Morgan Stanley was always the most aggressive (with the exception of Lehman) and very willing to purchase in England. Donal had first mover advantage and got them. Now, Ireland is a different “kettle of fish” entirely. It will be interesting to see who finds a suitor there, if there is one to be found.
Smart move by Morgan,gives them inside tract on The Brother,hopefully he’s smart enough to charge for any advice there,if required.
Pity was not made partner,hope he got some kicker,back end performance piece.Must have a “wealth” of experience,contacts.
@OMF sometimes when I am having an 18 year old ………Glenmorangie.
I look back on the days in the oul sod,cramming for the ” inter”
Recall reading a chap called Dickens,his oul fella was imprisoned for owing a few bob,and he campaigned for social justice.Thankfully,we live in much more enlightened times!
“Before the Bankruptcy Act of 1869 abolished debtors’ prisons, men and women in England were routinely imprisoned for debt at the pleasure of their creditors, sometimes for decades”
“Prisons were intended only to hold people until their creditors had been paid, or their fate decided by judges: usually execution, the stocks, flogging, the pillory, or the ducking stool.”
http://en.wikipedia.org/wiki/Marshalsea_Prison
Does NAMA provide any on going support to Developers who they have placed into receivership ect?
@patrick, In receivership – No.
@patrick; You’re question would imply that you believe that there is some collusion and amity between NAMA and the developers. I can assure you that no such relationship exists. If anything, there is deep mutual mistrust between the two. On NAMA’s side there is a disdain, amounting to contempt for the developers and on the other side there is a resentful animosity towards NAMA. Both sides are just awaiting the opportunity to stick the knife in …… and twist it.
re the mulryans – I thought if you were in NAMA – you or your family could not purchase the assets that NAMA have on their books – Is this why a lot of the developers have gone abroad to live and leave the ordinary decent tax payers of Ireland carrying the burden of debt – while they live in luxury in england and USA etc etc. This is not justice – My home town is like the deserted village – with so many businesses closed – On my street alone where there was once 40 businesses (in 1991) – there is now 8 – I run a small business and when I hear about NAMA and developers – It’s like they live on a different planet. Gerry Gannon is another one who signed a lot over to his wife – Are they laughing at the poverty that is in Ireland now – Believe me it is and people are struggling – Its frightening and the suicide rate is gone up but the like of Our ex Mr Bertie Ahern sleeps peacefully every night cushioned by huge pension – Can someone please anser me honestly – You retire at 50 + get a pension of over 100,000 – obtain a new job – still hold a pension – Is this fair ? I think anyone who retires at 50+ and starts a new job – the pension should be revoked
@melana, Currently the legislation does not allow the borrowers or their families to purchase the underlying assets from NAMA. However, it is a grey area as the legislation is probably unconstitutional and IMO a receiver is not restricted in who he/she sells to. Donal Mulryan has not purchased his assets back – Morgan Stanley has. It is likely that he will have some form of agreement with the bank to receive a salary or fee depending on performance. Would you rather that the state paid him dole? Like everyone else he has a right to earn enough to sustain himself and his family – another reason that developers move abroad.
I don’t think that it is the reason that some developers have moved abroad. That’s mainly because there are no banks, no liquidity and their businesses are broke. I don’t think that anyone finds the poverty in Ireland funny. 75,000 will emigrate in 2012 because the government wants to impoverish them further.
What happens to the €140m difference between the original loan value and the discounted value sold to morgan stanley. Is this swallowed by the tax-payer?
@SteveO, Yes.
It’s Friday,actually correlates exactly with full collection of the poll tax or household charge,so consider it like a dig out !