Efforts to breathe new life into an ageing Manhattan office building that is the flagship property of the family of President Donald Trump's son-in-law has gained a green light after a partial owner of the building indicated a willingness to sell.
Continue Reading Below
Steven Roth, chairman and chief executive of Vornado Realty Trust, said in a letter to its shareholders that there had been "much press" recently about 666 Fifth Avenue, a 60-year-old building that Vornado owns with the Kushner family.
"This is an ongoing, complex, dynamic, and unpredictable situation," Roth said in the letter dated April 4.
Vornado has a joint venture in the building with Kushner Cos., a real estate company whose chief executive until recently was Jared Kushner, an adviser to Trump who is married to Trump's daughter Ivanka. Jared sold his interests to a family trust in January.
Vornado declined to elaborate on Roth's letter, first reported by the New York Post late on Friday.
"Kushner Cos. is in active, ongoing discussions around 666 Fifth Avenue," spokesman James Yolles said in a statement. A previous statement had termed talks as "advanced."
Kushner said two weeks ago it ended talks to re-develop the 39-story building, valued for its proximity to Rockefeller Center, the Museum of Modern Art, and St. Patrick's Cathedral, with China's Anbang Insurance Group [ANBANG.UL].
Talks had centered on Anbang providing as much as half of $2.5 billion in equity in a plan that called for stripping the building down to its steel columns and adding about 40 floors.
The project was designed by Zaha Hadid, a Pritzker Prize award winner for architecture, before she died last year.
In February, Vornado said in a regulatory filing that the office segment of the building was under development or not available for lease, a sign the building was being emptied of tenants to accommodate a makeover.
Roth's letter showed that Vornado's share of debt in the office portion of the building was $691 million, which would value the Kushner's 50.5 percent share at about $705 million. While Roth said it is a "rare case" when Vornado may be sellers, he acknowledged since 2012 the real estate investment trust has increased selling activity four-fold. It executed $5.7 billion in asset sales, resulting in gains of $2.4 billion.
Any redevelopment plan could be hampered by the cost of buying out tenants with long-term leases or Spanish retailer Zara's store at the building's foot.
(Reporting by Herbert Lash)