Syndicated investments seemed to be the route to easy money in the good old days and a bevy of players cropped up, all promising annual returns of 15 per cent or more, and banks lined up to finance them and even lent investors the deposit
One of those that was set up in the years before the bust was D2 Private, which is owned by developer David Arnold (probably best known now for being the father of actress Leigh Arnold) and former Quinlan Private bigwig Deirdre Foley.
In 2006, D2 Private paid £325 million for Woolgate Exchange, a City of London office building let to German bank West LB. They then put the loan on the building into a bond.
The £239 million loan relating to the building is due to mature on July 18th and Fitch Ratings warned this week that D2 “may struggle to refinance the loan because of its size and leverage.
The property was revalued in September 2010 and had fallen 23.5 per cent in value since the closing of the bond, Fitch said, pointing out that this had resulted in the breach of the loans loan to value covenant. However it said that “the quality of the asset and residual lease length indicate a good chance of a full redemption of the securitised portion of the loan”.
D2 didn’t reply to a request for comment. The companys website, meanwhile, says it has launched a new global fundraising initiative to raise equity and debt to buy real estate assets and distressed debt associated with real estate assets.
