Kushner Cos. in talks to buy out partner in Fifth Ave tower
The family real estate company once run by White House adviser Jared Kushner is in talks to buy out its partner in a Manhattan skyscraper that has been losing money for years.
Kushner Cos. is negotiating with Vornado Realty Trust for its 49.5 percent stake in 666 Fifth Avenue, Kushner Cos. spokeswoman Christine Taylor said on Tuesday.
The real estate developer had sought billions from abroad to raze the 1950's-era office tower and replace it with a more modern building. But critics said the financing raised conflicts of interest issues given that its former CEO is in the White House helping to shape foreign policy.
Taylor said she could not comment about whether the Kushners would bring in other partners to buy the Vornado stake, or any other details. Vornado did not respond immediately to a request for comment.
The building has been losing money since Jared Kushner bought it for a record $1.8 billion in 2007. About a third of its offices are vacant, and a $1.2 billion mortgage is coming due early next year.
In a conference call with Wall Street financial analysts earlier this month, the publicly traded Vornado said that it wanted out of the building and was ready to sell.
Kushner Cos. had sought financing from a Chinese insurer with ties to the ruling Communist Party early last year, drawing criticism from government ethics experts and Democrats in Congress who worried the Chinese could use any deal as leverage with the Trump administration. The Kushner Cos. also sought money from a South Korean government fund, a French billionaire and a Saudi investor.
Just how Kushner Cos. would pay Vornado for its stake is unclear because it is a private company. Recent moves have given mixed signals about about its financial resources.
The family company and two partners reportedly paid a combined $685 million for two properties in Brooklyn a little over a year ago, a sign perhaps it has easy access to funds. In August, it bought garden apartments near Princeton, New Jersey, for $190 million.
Still, it's not clear how much the Kushner Cos. has paid out of its own pocket in its deals, how many outside groups have invested alongside it and whether these outsiders have provided much of the money. In a lawsuit involving apartment buildings it owns in Maryland, for instance, the Kushner Cos. recently disclosed it had foreign partners, whom it has not publicly identified.
Financial disclosure reports filed by Jared Kushner to the federal government do not shed much light, though a revision in a December report from Kushner and his wife, Ivanka Trump, suggests greater access to funds. The revision shows that Kushner and his father had joint access to far larger personal lines of credit than Kushner had previously reported — as much as $60 million more.
Kushner's latest report does not make clear exactly how much he and his father have drawn on the lines of credit or when they obtained the added credit lines. The original lines were assumed in 2015 and 2016, as Kushner worked for Trump's campaign.
The lines of credit are with Signature Bank, New York Community Bank and Bank of America, each providing as much as $25 million. Kushner previously reported that they were for no more than $5 million each.
Kushner sold his personal interest in 666 Fifth Avenue, the family's flagship property and headquarters, before joining the White House as a senior adviser to Trump.
The Kushner Cos. talks with Vornado were earlier reported by The Wall Street Journal.
Associated Press writer Stephen Braun contributed to this report from Washington.
Condon can be reached at http://twitter.com/BernardFCondon.