A partially empty, five-story building close to the old Guinness family home in Dublin's city center offers a glimpse into the slowdown gripping parts of the Irish capital's office market. The owner, Blackstone, is in talks to hand back the keys to 75 St Stephen's Green, which it bought in 2019 as part of a wider portfolio, to its lenders. "These assets were prudently written down to zero some time ago, given the well-documented headwinds facing the Irish office market," Blackstone said in response to questions. "These are extremely rare instances in our $600bn global portfolio where our office exposure remains minimal." Blackstone joins investors including Brookfield Asset Management and Henderson Park in seeing bets on Dublin's tech-heavy office market sour. After the pandemic hit, demand slumped just as supply surged, and the city now has one of the highest vacancy rates in Europe at more than 17pc. Worse may be ahead. "Dublin offices seemed like a good bet because of the city's track record of attracting and retaining US tech sector investment," John McCartney, real estate lecturer at Technological University Dublin, said. "As vacancy shifts to older buildings, their owners will be forced to cut rents and this could trigger some counter cutting." Across Europe the end of the low interest rate era sent property values plummeting as prices readjusted to reflect the higher rates of return available elsewhere. In many cities, limited development and robust tenant demand has partially offset that pain, as scant vacancy for the best new space has forced rents higher. That's softened the hit to values which are a function of both the rent a building generates and the multiple of that rent investors are willing to pay. But Dublin's vacancy rate has doubled in the last six years, exceeding the 10pc reached in Paris and 8pc in London and Lisbon, for example, according to broker CBRE Group Inc. Much of that increase is visible in empty suburban offices, though prime rents have still dropped about 11pc since 2022, Knight Frank figures show. That has precipitated a dramatic drop-off in new development that may lead to rents rising in the future but its little comfort to the private equity firms that bet on the Irish capital in the latter part of the low interest rate era. With valuations falling and loans coming due, an anticipated rebound hasn't protected them from the pain. Combined, Blackstone, Brookfield and Henderson Park invested at least €5bn of debt and equity in the city's offices between 2019 and 2022. What's Gone Wrong After the pandemic, Dublin office completions surged, with well over 200,000 square meters of new space delivered in 2022, the most in the past decade, according to data compiled by CBRE. But that was followed by a major slow down in office leasing, with the take-up of new office space dropping more than 45pc in 2023 and remaining below the long-term average since, the broker's data show. The amount of so-called gray space, offices that are leased but not occupied, also increased sharply and put more pressure on landlords looking for tenants. "Dublin had excessive supply growth over the last decade," said Mitchell Briggs, analyst at Green Street Advisors. Blackstone Burned Some were caught off-guard. Blackstone paid Starwood Capital Group €535m for the so-called Cedar portfolio, which includes the St Stephen's Green property. Starwood provided a mezzanine loan while Pacific Investment Management provided the senior debt. It has since sold off parts of the portfolio but the remaining €92m of equity has been written off, according to a person with knowledge of the write down. Blackstone is handing back the keys in the process of a consensual handover, the person said, asking not to be identified discussing confidential information. Talks are ongoing and they could still agree a restructuring, the person said. A representative for Blackstone declined to comment on the size of the write-off. Blackstone maintains this is a rare mis-step. Including Cedar, the firm bought or financed about €3bn of Dublin real estate, buying offices let to companies including Meta Platforms and Amazon.com. "Our Irish office portfolio is concentrated in high-quality, newly built assets attracting long-term blue-chip tenants," it said. "While short-term volatility may persist, Dublin's office market is well-positioned for the long-term." Not Just Blackstone A Blackstone mortgage trust also financed private equity firm Henderson Park's foray into the Dublin office market, providing a €1.2bn loan for the takeover of Green REIT in 2019. Founded by former Goldman Sachs partner Nick Weber, Henderson Park bought the property firm for €1.34bon. Since then, Henderson Park has written down the value of properties in HPREF Dublin Office Bidco, the entity which took Green Reit private, by €271.6m. It has also recorded a cumulative loss of €347m. The portfolio has been rebalanced toward industrial and logistics facilities, Henderson Park said. Still, some offices remain in the portfolio, with Vodafone, set to leave Central Park in the south of the city, leaving Henderson Park with even more space to fill. At least 200,000 sq ft is available, according to the Central Park website. "Central Park is going through a natural leasing cycle and remains the number 1 destination in Dublin's suburban office market," the firm said. "Our offices have performed throughout our ownership." Brookfield was also among the bidders for Green REIT when it was put up for sale. After losing out to Henderson Park in 2019, it eventually made its move in the summer of 2022, taking rival Hibernia REIT private for €1.1bn just as the European Central Bank began its hiking cycle. Since then, it has written down the value of the properties by €250m, filings show. The alternative asset manager recently secured a refinancing of the debt secured against Hibernia, replacing the €900m facility it used to buy the Reit in 2022 with €700m of debt. Brookfield too remains upbeat. "Hibernia's portfolio of high-quality, well-located assets, benefits from 98pc occupancy and a diversified tenant base," the firm said. And some optimism is emerging. The third quarter of 2025 saw the strongest quarter of take-up in over a year and there are signs that rents are again starting to rise, according to data compiled by CBRE. Still, last month, Irish builder Glenveagh Properties said it might be 2028 before its Freight Building, in Dublin's north docks is fully occupied and ready for sale. Back at 75 St Stephen's Green, talks to lease space in the building to existing tenant, legal firm Maples Group, are at an advanced stage. For now, though, a sign plastered on the glass front window still advertises 14,400 sq ft of space at one of the city's "premier" addresses. (Bloomberg)

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Lionbridge has recently been <a href="http://www.commonsenseadvisory.com/default.aspx?Contenttype=ArticleDetAD&amp;tabID=63&amp;Aid=37868&amp;moduleId=390" target="_blank">in the news</a> as the story of their <a href="http://www.lionbridge.com/lionbridge-enters-definitive-agreement-acquired-hig-capital/" target="_blank">“agreement”</a> to be acquired by H.I.G. Capital spread. I thought it would be useful to examine more closely what Private Equity is, and what they do since I found much of the commentary on the Lionbridge deal unclear, unsatisfying and quite unlikely to be accurate as they seem to overlook why PE gets involved at all. I thought that while I am at it, let me also add Luigi’s opinion which is also not a translation industry mainstream opinion, to provide alternate perspectives to the ones we have been hearing. &nbsp; &nbsp;From my early business career when I worked close to Wall St. and institutional investment, private equity meant firms like Kohlberg Kravis Roberts, The Blackstone Group, and Apollo Global Management. They were often called corporate raiders, and, in fact, they made a movie about a PE raider, called <a href="https://en.wikipedia.org/wiki/Wall_Street_%281987_film%29" target="_blank">Wall Street</a>, where Hollywood <a href="https://en.wikipedia.org/wiki/Gordon_Gekko" target="_blank">made PE rock stars</a> like Gordon Gekko, look bad, and suggested he/they lived by an ethos that “greed is good”, destroying companies to extract a few million dollars to buy a private yacht. Maybe that was an exaggeration, but it is true, that PE generally went into companies that they felt were undervalued or under-performing and went in and “cleaned up and improved the situation”. They showed them “how to do it right” as Frank Zappa would say. In fact, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1342522" target="_blank">there is research</a> that suggests that private equity investors are corporate doctors. Perhaps things have changed since the 90’s, and now Private Equity is a much more friendly and fluffy experience, but my ample gut tells me that generally investors want to make money, and they don’t acquire assets to get a board seat and hang out with the management. They generally want change that results in them making MORE money. &nbsp; &nbsp;An informative <a href="http://www.hbs.edu/faculty/Publication%20Files/15-081_9baffe73-8ec2-404f-9d62-ee0d825ca5b5.pdf" target="_blank">Harvard Business School draft paper</a> provides some insight on the whole Private Equity view of the world. Given that they base their observations on a study of 79 PEGs (Private Equity Groups) with $750B under management suggests to me that there could be some truth here. Top Private Equity Companies <a href="http://ln.is/com/tQ6QL" target="_blank">are listed here</a> HIG Capital who acquired LIOX is #70 in this list.

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