Good thing solving the middle East and reorganizing the entire government isn't nearly as difficult as managing a building https://t.co/4bdaIXgKtZ
— Ashley Feinberg (@ashleyfeinberg) October 16, 2017
Bloomberg reports Jared Kushner's plan to save his debt-laden office building 666 Fifth Avenue is falling aparthttps://t.co/ZyB5AlRMpi
— Gabriel Sherman (@gabrielsherman) October 16, 2017
…Their partner, Vornado Realty Trust, is telling brokers to plan for a much more mundane renovation that would leave the property as an office building, according to three people familiar with the matter. Vornado Chairman and Chief Executive Officer Steve Roth was never enthusiastic about the Kushner plan although until now he hadn’t stood in its way.
Putting an end to the Kushner effort — to salvage their overpriced investment by turning it into a Midtown jewel with expensive condos, a hotel and five-floor mall — could have profound ramifications for the family. Vornado, which owns 49.5 percent of 666 Fifth Ave., is unlikely to invest further in the property without first being reassured of its future, said three people familiar with Roth’s thinking. That means returning to the negotiating table with lenders — a battle that could result in Kushner Cos.’ losing control of the building, said the people, who asked not to be named discussing private deals…
Roth is famously press shy and private and has instilled that ethos in other company executives. When he suffered a minor heart attack in August — something that many publicly-traded companies would immediately disclose to investors — it took more than a month for the news to break. So Vornado’s switch of directions for 666 Fifth is probably leaking out for a reason, according to three people familiar with him: he’s signaling to any lenders or investors who may still be interested in the Kushner effort to back off, the people said.
It’s a sharp reversal. As recently as March, both Vornado and Kushner were looking at a massive windfall from Anbang Insurance Group. The Kushner family stood to gain a $400 million cash payout from a deal being discussed with the Chinese insurer, while realizing their dreams of building a glamorous skyscraper. But Anbang, which had previously bought up several major U.S. properties, including the Waldorf Astoria hotel, pulled out of the negotiations amid a public outcry in the U.S. over conflict-of-interest concerns and a crackdown by the Chinese government on overseas investments…
Pressure is mounting because a $1.2 billion mortgage is due in February 2019, while losses make it unattractive to lenders who might refinance the debt. The building lost $14.5 million in 2016 and is on track to lose $24 million this year after a boost in the loan’s interest rate, according to data compiled by Bloomberg. A 30 percent vacancy rate, as of June, has deepened the losses as Kushner Cos. prepared to demolish the property and replace it — a process that would have required buying out existing leases. Vornado’s plans are designed to fill the building at market-rate rents and stanch the bleeding, three people said…
For entertainment purposes only (since there’s not much that hasn’t already been chewed over here), Kyle Pope in CJR on “The Jared Bubble: What my 18 months as Jared Kushner’s first editor taught me about the Trump family and the press”:
“You can’t say ‘hit job’ in here.”
I was six months into my tenure as the editor of the New York Observer, and I was schooling my publisher, Jared Kushner, on why ordering up a slam of someone who had crossed his family in business didn’t pass the journalistic smell test.
Late Night Schadenfreude Open Thread: Alas, Young Jared!Post + Comments (41)