Kushner Cos. Reportedly Close To Partnership With Brookfield For 666 Fifth Ave.
Kushner Cos. is once again close to securing the future of the embattled 666 Fifth Ave.
The company is in the late stages of negotiating a partnership with deep-pocketed REIT Brookfield Properties, which would take over management and leasing for the building and kick off a major renovation, the New York Times reports. Brookfield's second-largest shareholder is the Qatari Investment Authority.
Kushner Cos. purchased 666 Fifth Ave. for $1.8B just before the recession, when Jared Kushner was its CEO. Family patriarch Charles has resumed running the business while Jared serves as a senior adviser to President Donald Trump. Charles recently told CNN that he had pushed Jared to make the deal, which has proved to be a mistake.
For years, the Kushners had planned to tear down the 41-story, aluminum-clad tower and replace it with a $7.5B supertall with hotel rooms and condominiums, but they were unable to secure financing after deals with Chinese firm Anbang and a former prime minister of Qatar fell through. The building is saddled with $1.2B in debt that will mature in February, and Kushner Cos. has been scrambling to refinance somehow.
Vornado, owner of 49.5% of 666 Fifth, did not support the redevelopment plan and was positioned to take full control of the building if Kushner defaulted on its loans. With the Brookfield deal, Kushner will buy out Vornado's stake and pay $120M to settle a previous loan it took out with Vornado, which will maintain ownership of the retail condo at the base of the building.
Brookfield plans to completely redo the facade of the building, the Times reports, replacing the aluminum with floor-to-ceiling glass windows, and plans to renovate the lobby and elevator systems as well.
Jared Kushner has repeatedly come under suspicion for potential conflicts of interest between his White House position and his real estate holdings, due to repeated omissions on his financial disclosure forms and meetings he has taken with foreign officials and corporate interests that some say could have mixed government with business.
A meeting involving Jared, Donald Trump Jr. and Russian officials over potential information about Hillary Clinton has become a focus of special counsel Robert Mueller's investigation, and could potentially have included discussions about Kushner's properties.
Despite previous meetings with Qataris over 666 Fifth, Jared was part of the team advising Trump on how to respond to the blockade of Qatar by some of its Arab neighbors, further raising conflict of interest suspicions. Charles met with Qataris in 2017 over 666 Fifth, but later claimed he no longer wanted to do any deals with foreign partners.
Brookfield's Qatari connection will raise eyebrows in light of that statement, as well as claims that Trump attorney Michael Cohen solicited $1M in payments from Qatari Investment Authority's head of investments, Ahmed al-Rumaihi, to facilitate a lifting of the blockade.
Jared Kushner sold his stake in 666 Fifth Ave. to a trust run by his mother, but still owns 90% of the properties he held before taking his job at the White House.
