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Should NAMA openly advertise all 'Properties For Sale'?


MsAnneThrope

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On the RTÉ news website today there is a headline:

NAMA close to selling properties worth €500m

NAMA is in advanced discussions to dispose of €500m worth of properties.
Advanced discussions with who exactly and what properties? And how do these potential buyers know what NAMA is considering selling? It's an offence to lobby NAMA so if people are hustling NAMA, to cherrypick properties that it has in its possession, would that qualify as a lobbying offence?

NAMA also claims that an indebted developer/company cannot repurchase its loans/properties/land back from NAMA at a reduced/distressed price. I have seen several suggestions, on p.ie and elsewhere, of the possibility of new companies/syndicates being set up for the sole purchase of buying back the very same distressed loans/properties/land, that they originally had transferred into NAMA, at significant discounts. This is a realistic concern and is probably achieveable through new labyrinthine vehicles, possibly offshore, but where the ultimate beneficiaries are the very same people whose loans NAMA took over in the first place.

Unless NAMA operates in a more transparent manner when it comes to selling properties then this suspicion will always be present. Therefore, I ask the question, should NAMA openly advertise all properties, without exception, that it intends to sell, and furthermore should it reveal who bought them? I am sure there are members of the public, not to mention foreign investors, who do have cash/savings, who may be interested in some bargains as they arise. Why shouldn't the public and/or foreign investors be offered the opportunity to purchase them? And is there not an argument that all properties should be auctioned to the highest bidder in order to get the highest return for the taxpayer?

God knows NAMA has an army of contracted estate agents, valuers and auctioneers hired through tenders who could oversee this process and even set up a website, as an extension to NAMA's existing one, where such properties could be openly advertised. It's what they do for a living themselves anyway, so there's nothing complicated about it.

Or is NAMA just going to operate in secrecy and potentially let the usual suspects cherrypick bargains from right under our noses?
 

MPB

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That is why these preferred Estate Agents were appointed. They were Developers themselves and are now privvy to insider information.

Expect them to approach loyal clients and the now famous consortia will be established, of course involving a few relatives of politicians and Estate Agents.

Expect the name Green Properties to surface as well.
 

Cassandra Syndrome

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So after 6 months 0.5% of the value of the property portfolio is in an advanced level for selling?

Well done, just 100 more years to clear the stock. Great.

Market forces to NAMA is like a cross to Dracula. All those "loans" become exposed. Ouch. I say there must be a shrine by the elite for the creator of the SPV model.
 
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Deleted member 17573

When you're dealing with such a diverse range of property assets you cannot say that one approach will suit all of the disposals. Everything from public auction to privately negotiated deals with possibly very complex terms will all be employed. It would be a bit silly to tie the hands of the professionals employed to do the job - I'm sure if you were disposing of a property you would want to maintain discretion over what would be the most appropriate means of doing so.
 
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Deleted member 17573

So after 6 months 0.5% of the value of the property portfolio is in an advanced level for selling?

Well done, just 100 more years to clear the stock. Great.

Market forces to NAMA is like a cross to Dracula. All those "loans" become exposed. Ouch. I say there must be a shrine by the elite for the creator of the SPV model.
CS - you know better than most around here that there is a start-up period during which there will actually be very little selling activity. What are you trying to do - stir up the nutters?
 

Libero

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MsAnneThrope said:
Or is NAMA just going to operate in secrecy...?
Don't you think the NAMA legislation, as enacted, answers that question pretty clearly?

The whole process and culture of NAMA has been signalled from the start. I'll give the government credit for that.

Defenders of NAMA will point to borrowers' customer confidentiality as an excuse for the agency operating in the shadows without full advertising, as if that right to confidentiality ever stopped banks in the past advertising sales of property (i.e. where the property was the secured interest in a loan agreement, and the bank was exercising a legal power to sell it).

We can hope that journalists will keep an eye on public filings with the Property Registration Authority to catch evidence of land transfers. Then again, NAMA will be free to publish nothing more than aggregate-level statistics, and use the existing legislation to threaten journalists with jail, should they do anything more than speculate about the parties behind dealings, and whether the land is "in NAMA" at all, nevermind the details of those dealings.
Besides, like you mentioned, those public filings won't reveal much at all if shell companies are used as counterparties, and if consideration is structured away from the Contract for Sale.

Perhaps the best deterrent to rampant corruption and wrongdoing inside NAMA is a firm public commitment from Fine Gael and Labour that they will, after entering government, open up the operation of NAMA and details of its dealings.
 

Tommythecommy

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Even if you prohibited reselling they would do reciprocation

http://www.politics.ie/fianna-fail/132908-surrender-regrant-2011-fianna-fail-style.html

Even if you prohibited reselling they would do reciprocation.

The Developer community will be buying back the property formerly owned by their competitors.

Nothing to stop Michael buying Patrick's old site and Patrick buying Michael's site.

We need to realise that dear property is most adverse to our Economy and our Society.

Lumbering our Society with the costs of a banking crash is bad for our Economy and our society.

Extending finance from Irish Banks to these Buyers of NAMA assets at levels which would net NAMA a "Good Price" is more risk and folly for our society and economy.

If NAMA is selling in a Bearish mood before the price falls further the risk is simply being transferred to our Banks.

If NAMA is selling to a genuine market of bulls then the taxpayer is making a loss.

NAMA will not meet its targets
 

MsAnneThrope

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When you're dealing with such a diverse range of property assets you cannot say that one approach will suit all of the disposals. Everything from public auction to privately negotiated deals with possibly very complex terms will all be employed. It would be a bit silly to tie the hands of the professionals employed to do the job - I'm sure if you were disposing of a property you would want to maintain discretion over what would be the most appropriate means of doing so.
I'd want the highest price first and foremost Sailor and if that meant telling one of my friends 'tough but I found someone offering 10% more' then so be it.

The professionals that NAMA has contracted have their own respective windows full of adverts for commercial offices, houses and land banks. Why not NAMA too, but on a website instead?
 

st333ve

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If so much property is put on sale at once like that, the falling supply and demand rate would shatter the housing market north and south and hamper recovery.

Crazy idea.
 

Tommythecommy

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Complex contracts and conditions limit competition

I'd want the highest price first and foremost Sailor and if that meant telling one of my friends 'tough but I found someone offering 10% more' then so be it.

The professionals that NAMA has contracted have their own respective windows full of adverts for commercial offices, houses and land banks. Why not NAMA too, but on a website instead?
Complex contracts and conditions limit competition.

So what happened the Lenehan fairytale ending of holding the assets until they finally returned a profit?
 

Cassandra Syndrome

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CS - you know better than most around here that there is a start-up period during which there will actually be very little selling activity. What are you trying to do - stir up the nutters?
Starting up period? They are assuming ready to go property portfolios, not a brand new manufacturing facility that has a learning curve to endure.

The name of their game is too offload the properties as soon as possible as the clock is ticking. They have time preference issues with maintenance, depreciation and above all interest. And this is in a market that is nowhere near bottom.

Every working day that passes another 3 Million Euro of interest is accrued. And the depreciation and maintenance of those properties in total assuming there is 300,000 units is 13 Million Euro per day.

So they would want to offload or receive in rent at least €300 Million a month and thats even before contributing towards the €40 Billion initial principal.
 
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Deleted member 17573

I'd want the highest price first and foremost Sailor and if that meant telling one of my friends 'tough but I found someone offering 10% more' then so be it.

The professionals that NAMA has contracted have their own respective windows full of adverts for commercial offices, houses and land banks. Why not NAMA too, but on a website instead?
That's the point I'm making - if you valued your property at 400k and somebody approached you privately and offered you 500k you would not want to be restricted from accepting the offer. I am not saying that properties should not, in general, be advertised - but I am saying that I would not favour insisting on all properties being advertised if, in some cases, a better outcome can be anticipated from a private and confidential transaction.
 

Tommythecommy

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There can be no real recovery based on dear property

If so much property is put on sale at once like that, the falling supply and demand rate would shatter the housing market north and south and hamper recovery.

Crazy idea.

There can be no real recovery based on dear property.

Northern Ireland is not a consideration in the NAMA disposal.

Who will provide the finance, and on what terms?

What is good for NAMA cannot be good for our Banks
 

Disillusioned democrat

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This was always going to be really difficult - getting the balance between confidential and secret. The kind of parties involved haven't demonstrated any sense of understanding and adhering to good business ethics to date, so it's frankly hard to trust a bunch of developers, estate agents, solicitors, and even internal auditors NOT use the cloak of confidentiality to abuse the system....really hard.

The idea of a retrospective "outing" is very good, as it will force people to think twice, but possibly just forewarn people against leaving too much evidence.

I hate to admit it, but we really just need to trust the professionals on this....
 

Cassandra Syndrome

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If so much property is put on sale at once like that, the falling supply and demand rate would shatter the housing market north and south and hamper recovery.

Crazy idea.
The quickest solution is to forget about NAMA and sell the whole frickin lot of them. Let the market clear it all out. Sell them off at a couple of grand if need be. How many people are homeless in this country and how many people are on housing waiting lists? Its insane.

2 years of a clearing out phase and let the market establish a new equilibrium. After that just build houses to demand based around savings and investing and dynamic market discipline outside of an insane credit bubble fueled by fractional reserve banking.
 
D

Deleted member 17573

The quickest solution is to forget about NAMA and sell the whole frickin lot of them. Let the market clear it all out. Sell them off at a couple of grand if need be. How many people are homeless in this country and how many people are on housing waiting lists? Its insane.

2 years of a clearing out phase and let the market establish a new equilibrium. After that just build houses to demand based around savings and investing and dynamic market discipline outside of an insane credit bubble fueled by fractional reserve banking.
CS - I'm absolutely certain you are fully conversant with the concept of managing the disposal of an asset portfolio - and I'm equally certain that you know full well that "yerra, fire it all onto the market on Monday morning" would not be viewed as the optimum approach:)
 

Tommythecommy

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We need to let the Crash take its course

We need to let the Crash take its course.

We need to make the ECB to pick up most of the tab for the banking losses.

We need to avoid blowing another bubble and providing tax breaks for property ownership. We need to encourage our population to acquire productive assets, with their savings instead, and stop effectively taxing our people to support a cohort who have no greater skill than changing the colour on a land map from green to yellow or blue.

We should instead tax property ownership.


Allowing the market to find its own floor would encourage new banks to enter the Irish Market place as they will not do so while artificial supports prop up the price of property.

Reinflating the property bubble is no solution as the only buyers are ourselves and our children
 

Cassandra Syndrome

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CS - I'm absolutely certain you are fully conversant with the concept of managing the disposal of an asset portfolio - and I'm equally certain that you know full well that "yerra, fire it all onto the market on Monday morning" would not be viewed as the optimum approach:)
1. What type of assets are we talking about?

2. What are the costs of maintaining these assets?

3. Are they self financing?

4. What is the future values of these assets?

5. What is the Net Present Value of these assets?

6. What is the discount rate, if any?

The quicker vacant houses are sold in an aggressive bear market the better. Houses can be white elephants if there is no one residing in them to keep them maintained and serviced.
 

MsAnneThrope

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That's the point I'm making - if you valued your property at 400k and somebody approached you privately and offered you 500k you would not want to be restricted from accepting the offer. I am not saying that properties should not, in general, be advertised - but I am saying that I would not favour insisting on all properties being advertised if, in some cases, a better outcome can be anticipated from a private and confidential transaction.
True but it can also work in reverse i.e. you get a lower price than if you had publicly advertised it.

Anyway, back to the NAMA Business Plan:

NAMA’s commercial mandate is to obtain the best achievable financial return on the assets acquired by it. It will have all the necessary commercial powers of a financial asset management company to establish subsidiaries, to operate through agents, to buy and sell assets, to manage loans and work with borrowers, to borrow, to lend, to provide guarantees and to take whatever action it considers appropriate in relation to the debts owing and the underlying security. In order to enhance market liquidity and demand for its assets, NAMA will engage with domestic and international investors interested in opportunities to invest in one or more of its sub-portfolios
How could these investors be interested if they don't know what's for sale? Is NAMA cold-calling selected people saying what it has coming up, or is the onus on investors to contact NAMA to seek this information? What if, for example, I put together 10 people with 100k each, and we wanted to buy a small housing estate of 10 houses for a million? Will NAMA "engage" with us? We'd qualify as "domestic investors" surely. How do we get in on the action? Or do we just turn up at 11pm in the usual city centre hostelries, pen and beermat in hand?
 

MsAnneThrope

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Don't you think the NAMA legislation, as enacted, answers that question pretty clearly?

The whole process and culture of NAMA has been signalled from the start. I'll give the government credit for that.
Oh aye, I remember it well, and the debates here. I can fully understand protecting the finer details of individual loans, identity of names etc etc

But surely now when we come to the actual "selling" of assets I find it hard to understand why the identity/prices of the respective properties need to be veiled in the same cloak of secrecy as the individual loan details. As you said, hopefully a new Govt will make things more transparent.

I wonder what properties they're flogging right now and what their "LTEV" is.
 
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