Company owned by family of Jared Kushner getting unusually favourable terms as part of agreement to buy block on Fifth Avenue in New York, say real estate experts
A company owned by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, stands to receive more than US$400 million from a prominent Chinese company that is investing in the Kushners’ marquee Manhattan office tower at 666 Fifth Ave. The planned US$4 billion transaction includes terms that some real estate experts consider unusually favourable for the Kushners. It provides them with both a sizable cash payout from Anbang Insurance Group for a property that has struggled financially and an equity stake in a new partnership. The details of the agreement, which is being circulated to attract additional investors, were shared with Bloomberg. It would make business partners of Kushner Cos and Anbang, whose murky links to the Chinese power structure have raised national security concerns over its US investments. In the process, an existing mortgage owed by the Kushners will be slashed to about a fifth of its current amount. The document offers a rare look at a major deal by a close Trump associate and family member. It is unclear whether the deal could prompt federal review, as occurred when Anbang bought other properties like the Waldorf Astoria Hotel in Manhattan. Anbang could also face review by the Chinese government, which has been clamping down on overseas investments and which has a range of pending issues with the Trump administration. The proposed partnership is seeking additional participants through a controversial federal programme known as EB-5, which is intended for economically distressed neighbourhoods and provides residency permits to major foreign investors. The deal would value the 41-storey tower at US$2.85 billion, the most ever for a single Manhattan building: US$1.6 billion for the office section and US$1.25 billion for the retail section. The new partnership will refinance US$1.15 billion in existing mortgage debt. “This is a huge, huge exit strategy for an office building,” said Joshua Stein, a New York real estate lawyer. “It does sound like a home run of a transaction for Kushner and his group.” Scott A. Singer, president of the Singer & Bassuk Organisation, said the terms struck him as “aggressive but not absurd”, based on the net income and square footage metrics he was shown by Bloomberg. He said they were along the lines of what might be expected for a trophy asset at a prime location. Kushner Cos declined to discuss details of the plan or name the potential lenders or investors it is courting, saying the deal was not finalised. A company spokesman, James Yolles, said that Jared Kushner sold his ownership stake in 666 Fifth to family members so the transaction posed no conflict of interest with his White House role. “Kushner Companies has taken significant steps to avoid potential conflicts and will continue to do so,“ Yolles said in a written statement. A White House spokeswoman said Kushner would recuse himself from any matter where his impartiality could be reasonably questioned, including an examination of the EB-5 programme. Some government ethics experts argue that the Kushner family and business are so close-knit that the steps Jared Kushner has taken do not go far enough.
