Kushner Cos. Will Move to the General Motors Building -- WSJ
20 Mai 2020 - 9:02AM
Dow Jones News
By Peter Grant
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 20, 2020).
Kushner Cos., the real-estate business owned by the family of
senior White House adviser Jared Kushner, is moving its
headquarters out of the office tower at 666 Fifth Ave., the tower
at the center of the Kushners' push into the Manhattan real-estate
market just before the 2008 crash.
Kushner Cos. is moving to the top floor of the General Motors
Building on the southeast corner of Central Park, one of the most
coveted office addresses in the city, according to people familiar
with the matter. The family has been looking for new Manhattan digs
following its distressed sale of control of 666 Fifth Ave. to
Brookfield Asset Management in the summer of 2018.
Brookfield, which valued the deal at $1.29 billion, last year
launched a $400 million overhaul of the 39-story building which was
built in the 1950s. As part of that overhaul Brookfield has been
vacating 666 Fifth of tenants including Kushner Cos., which
occupies about 15,000 square feet in the tower.
The move comes as the commercial real-estate industry, like most
businesses, has been in upheaval as a result of the Covid-19
pandemic. Tenants are falling behind on rent payments, landlords
are defaulting on loans and investors are looking for steeply
discounted prices.
Kushner Cos. has closed one discounted acquisition. In April,
the company purchased a $30 million loan backed by a Brooklyn
apartment building sold by SL Green Realty Corp., New York's
largest office building owner. The real-estate investment trust has
been trying to shore up its balance sheet in the wake of a
collapsed Manhattan property sale. Kushner paid about 90 cents on
the dollar, according to people familiar with the matter.
Kushner Cos. is subleasing 20,500 square feet of space on the
50th floor of the General Motors Building for 10 years from Itaú
Unibanco Holding SA, Brazil's largest bank. Kushner is paying about
$100 a square foot, about half of what Itaú is paying, according to
people familiar with the matter. A representative for Itaú didn't
respond to a request for comment.
Kushner Cos. was based in New Jersey before it purchased 666
Fifth Ave. in 2007 for what was then a record price of $1.8
billion. The highly leveraged deal ran into trouble when the global
financial crisis hit, sending Manhattan rents and occupancies
plummeting.
The Kushner family's efforts to salvage their investment in 666
Fifth Ave. became a lightning rod for critics of the Trump
administration. They alleged that some of the investors that showed
an interest in investing in the troubled property, such as Anbang
Insurance Group Co. of China, may be doing so to curry favor with
Jared Kushner, who is the husband of Mr. Trump's daughter, Ivanka,
and his father-in-law.
Mr. Kushner sold his stake in 666 Fifth and other assets to a
trust controlled by other family members to avoid potential
conflicts after joining the Trump administration.
The financial problems facing the building were solved by the
Kushners' sale of a 99-year lease of the property to a venture
controlled by Brookfield. The Kushners retained an interest in that
venture but Brookfield is in charge of the building's redevelopment
and is changing its name to 660 Fifth Avenue.
Write to Peter Grant at peter.grant@wsj.com
(END) Dow Jones Newswires
May 20, 2020 02:47 ET (06:47 GMT)
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