Kushners give up control of ‘tower’ to save themselves

Bloomberg

The Kushners have found their out—and it comes at a price.
The family firm of presidential son-in-law Jared Kushner will be relieved of the biggest drag on its real estate empire, will no longer face a $1.2 billion debt payment due in months, will be rid of having to overhaul an aging property. But in return, they’ve given up control of the trophy New York tower that was meant to be their crown jewel. Brookfield Asset Management Inc.’s deal for a 99-year lease at 666 Fifth Ave., the Midtown building purchased by Kushner Cos. at the height of the last real estate boom, gives the Canadian giant ownership of the tower in every way but the deed.
It will invest $700 million to fulfill what had been the Kushners’ dream of turning the property into a world-class skyscraper in the heart of Manhattan’s premier office district. The Kushner family will have to watch from the sidelines.
It’s a stunning conclusion to a problem that became a matter of national interest because of the role Jared Kushner, the company’s former chief executive officer, plays as senior adviser to President Donald Trump. Kushner sold his portion of the building to his family and no longer has a formal role with the company, but he’s still deeply invested in its well-being. A Kushner Cos. spokeswoman declined to comment on the transaction.
For Kushner Cos., the Brookfield deal ends its involvement in a property that had become an albatross. When the company bought 666 Fifth Ave. for $1.8 billion in 2007, it was meant
to signal its ascension from New Jersey, where it had built a fortune and suffered an embarrassing legal battle. But as boom turned to bust there was little time to celebrate. The building was soon drowning in debt, and the family ricocheted between stop-gap fixes.