Kushner Cos. Is Negotiating To Take Back Full Control Of 666 Fifth Ave. From Vornado
After clashing over the future of the embattled 666 Fifth Ave., it appears Kushner Cos. and Vornado are ready to end their relationship.
Kushner is negotiating a buyout of Vornado's 49.5% stake in the Midtown office tower, Bloomberg reports. Vornado bought into the property in 2011 for $80M and the assumption of half its debt, which totals $1.2B and comes due in early 2019.
Jared Kushner, now a senior adviser to his father-in-law, President Donald Trump, purchased 666 Fifth as CEO of Kushner Cos. for a then-record $1.8B in 2008, on the precipice of the financial collapse. The company financed all but $50M of the purchase with debt, and brought Vornado on as a way of easing the burden.
But Vornado CEO Steven Roth never threw his support behind the Kushner Cos.' vision for redeveloping the property into a modern mixed-use skyscraper, and reportedly did not help Kushner in its search for assistance in paying off the debt.
Though the redevelopment plans have since been scuttled, Vornado has indicated that it intends to exit its investment by the end of this year, according to Bloomberg, meaning it could be amenable to working with Kushner Cos. Yet the reason for Vornado's involvement in the first place — Kushner's inability to pay off the debt — does not appear to have changed, which could lead lenders to block the deal.
Kushner could still find another partner to help buy out Vornado and pay off lenders, but Bloomberg's sources said partners remain reluctant to buy into such a distressed asset. Kushner could reportedly put itself in better standing by paying off some of its debt ahead of the due date.
Jared Kushner, who still owns some property through his former company, is suspected of attempting to arrange financing for 666 Fifth in meetings with Russian diplomats and business people that he initially failed to report in disclosure forms when he joined the White House.
