Kushners Near Deal With Qatar-Linked Company for Troubled Tower
Posted May 17, 2018 1:16 p.m. EDT
NEW YORK — The company controlled by the family of White House adviser Jared Kushner is close to receiving a bailout of its financially troubled flagship building by a company with ties to the government of Qatar, according to executives briefed on the deal.
Charles Kushner, head of the Kushner Cos., is in advanced talks with Brookfield Properties over a partnership to take control of the 41-story aluminum-clad tower 666 Fifth Ave. in Midtown, according to two real estate executives who have been briefed on the pending deal but are not authorized to discuss it. Brookfield is a publicly traded company, headquartered in Canada, one of whose major investors is the Qatar Investment Authority.
Kushner and his son Jared, President Donald Trump’s son-in-law and one of his key advisers, bought the office tower, which is between 51st and 52nd streets, 11 years ago for a record-setting $1.8 billion. But the building today only generates about half its annual mortgage payment, and 30 percent of the 41-story tower is vacant.
In late 2016, Kushner and his son were close to a much different kind of deal with Anbang, a giant Chinese insurance company with ties to the country’s ruling elite, and with a billionaire from Qatar, Hamad bin Jassim Al-Thani. That plan involved demolishing the existing building at 666 Fifth and erecting a $7.5 billion luxury super tower.
But the deal collapsed a year ago, amid criticism from legislators over the connection between Jared Kushner’s political role and the family business. Jared Kushner left the family business after Trump’s election and is now a key adviser to the White House.
The deal with Brookfield is likely to raise further concerns about Jared Kushner’s dual role as a White House point person on the Middle East and a continuing stake holder in the family’s company. Kushner earlier this year lost his top-secret security clearance amid concerns that foreign governments could attempt to gain influence with the White House by doing business with the Kushner Cos.
Although he resigned as chief executive of the company when he joined the White House in January 2017, Kushner retained most of his stake in the firm. He shed some of the assets — including his stake in 666 Fifth Ave. — by selling them to a trust controlled by his mother. His real estate holdings and other investments are worth as much as $761 million, according to government ethics filings.
Brookfield has extensive ties to Qatar. The Qatar Investment Authority is the second-largest shareholder in Brookfield Properties, ranking only behind Brookfield’s former parent company. And the Qatar fund and Brookfield have teamed up on several real estate deals in the United States and elsewhere in recent years, including Brookfield’s retail and apartment complex, Manhattan West, now under construction on the West Side. Brookfield and Qatar also control the Canary Wharf office complex in London.
Brookfield, which will take over leasing and operating 666 Fifth, plans to spend hundreds of millions of dollars to give the 61-year-old building a major face-lift: stripping off the distinctive aluminum facade, installing floor-to-ceiling windows, renovating the lobby and installing new elevators, according to the executives.
If a deal is struck, Charles Kushner will buy out his old partner, Vornado Realty Trust, which owned 49.5 percent of the office space but were not interested in renovating the tower.
Kushner will pay Vornado $120 million to settle an $80 million high-interest loan Vornado provided for the office building six years ago. Vornado, however, will continue to own the building’s valuable Fifth Avenue retail space.
The Kushner Cos. and Brookfield both declined to comment.