Jeeves
Who just bought Jared Kushner?
Tue Apr 10, 2018 11:40am
2601:405:4400:f7ff:80da:8cc6:34ea:3dfa

At least he can say he isn't cheap.
Jared Kushner’s $1.2 billion miracle
Someone is doing Jared Kushner a huge favor. But we don't know who.

(excerpts - lots of information at the link)

The 41-story skyscraper at 666 Fifth Avenue in Manhattan was supposed to be Jared Kushner’s signature investment. A 27-year-old Kushner bought the property in 2007 for a record $1.8 billion — the most ever paid for an office tower. The move was supposed to catapult the family real estate firm, previously known for mid-priced apartments in New Jersey, into the big leagues.

It has been an unmitigated disaster.

Shortly after the sale, the recession hit, depressing the commercial real estate market in Manhattan. To keep things afloat, Kushner was first forced to sell the building’s lucrative retail space and nearly half of the office space to Vornado Realty Trust, a firm with much more experience in real estate.

But even that was not enough. The building is aging, and therefore is saddled with high vacancies and low rents. That means that instead of rent payments covering the mortgage, Kushner’s firm and Vornado are having to pour in millions every year to stay current on the debt.

On the horizon is an even bigger problem. The full mortgage for the office space of about $1.2 billion becomes due in February 2019. Many real estate experts believe that the mortgage balance exceeds the value of the portion of the property still owned by Kushner, making refinancing a challenge.

Upon entering the White House, Jared Kushner divested the property only in the most technical sense. He “sold” the assets to his brother and a trust controlled by his mother. A lawyer described the transaction to the New York Times as a “shell game.”

Now, with Kushner ensconced as a senior adviser in the White House, someone has emerged to bail him and his family out of this mess. The identity of Kushner’s white knight is a mystery.

The $1.2 billion bailout

In a filing with the SEC on Friday, Vornado revealed the existence of an extraordinary “handshake” agreement that would not only refinance the $1.2 billion but allow the Kushners to buy out Vornado’s portion of the debt. This means the Kushners would once again own the entire office tower and Vornado would own only the retail space.

The key question, however, is who would lend $1.2 billion to the Kushners to refinance an aging office tower with high vacancy rates? As of now, neither the Kushners nor Vornado is revealing who is facilitating the deal.

The existence of the deal, however, raise troubling questions about the whether it is based on the economic potential of the property or an effort to gain access and influence in the Trump White House.

The Kushners’ international adventure

The office space in 666 Fifth Avenue is an unlikely candidate for traditional refinancing since it’s probably not worth as much as the mortgage, which exceeds $1 billion. That has forced Jared Kushner and his family to get creative.

Place your bets now.

I'm going to go with the Chinese, who were interested earlier but never closed the deal. This would give them lots of leverage in the ongoing Trump tariff tantrum.