2018-04-08 — nytimes.com
The Kushner family appeared on Friday to have struck a deal to buy out its partner in the troubled Fifth Avenue skyscraper at the center of its real estate empire, according to a filing with the Securities and Exchange Commission.
The Kushners' partner, the publicly traded Vornado Realty Trust, has indicated for months that it was interested in selling its stake in the building, and on Friday, Steven Roth, Vornado's chairman, said in the filing that it had reached a handshake deal "to sell our interest to our partner."
The Kushners have attracted enormous public attention because of their connection to President Trump. Jared Kushner, Mr. Trump's son-in-law, was chief executive of the company until he joined the White House last year as one of Mr. Trump's key advisers.
It is unclear if the announcement from Vornado means the Kushners have found a new partner, or who might be providing the financing for such a deal.
In 2011, the Kushners sought to restructure their debt. Vornado bought a 49.5 percent interest in the building's office space and agreed to invest up to $80 million and take responsibility for a portion of the mortgage. The mortgage was divided into a $1.1 billion note and a $115 million secondary loan.
But Vornado imposed stiff terms. It was getting 11 percent interest on money it actually invested in the building, and a 3 percent return on the remaining money, if any, according to a financial report from Trepp, a company that tracks real estate debt.
The mortgage has swelled to $1.4 billion with accrued interest. The partners have been forced to cover shortfalls on the mortgage payments. And Vornado subsequently bought much of the retail space along Fifth Avenue from Crown and Carlyle for $707 million, except for a portion owned by Zara, the Spanish clothing chain. Vornado is expected to hang onto the retail space.
Comments: Be the first to add a comment