Wow!! Kushners China Deal Flop Was Part of Much Bigger Hunt for Cash ie: 1.1 BILLION IN DEBT
(Long and involved but worth the read :https://www.bloomberg.com/graphics/2017-kushners-china-deal-flop-was-part-of-much-bigger-hunt-for-cash/)
Kushners China Deal Flop Was Part of Much Bigger Hunt for Cash
Jared Kushner, Donald Trumps son-in-law and top adviser, wakes up each morning to a growing problem that will not go away. His familys real estate business, Kushner Cos., owes hundreds of millions of dollars on a 41-story office building on Fifth Avenue. It has failed to secure foreign investors, despite an extensive search, and its resources are more limited than generally understood. As a result, the company faces significant challenges.
The troubles caused by 666 Fifth have their origins in the overheated moment of its purchase. On Thanksgiving of 2006, Charlie Kushner made clear he wanted all employees in the office the next day. Tishman Speyer Properties, a real estate company with a New York pedigree his own company lacked, was looking to sell an office tower in midtown Manhattan, and Kushner wanted it. Tishman was demanding that the deal be done fast. The financing had to be put together by Sunday.
As the buildings fate became increasingly bleak, the family, rather than forfeit, decided to go big. Their plan was to raze the structure and replace it with a glimmering Zaha Hadid-designed tower of massive proportions. The scale of the plan stirred the imagination, but the costs were astronomical because they involved repurchasing the property rights theyd sold to keep the original building afloat. That alone would require more than $1 billion. The elaborate renderings of the reconfigured building promised a kind of Time Warner Center on steroids: more than 80 stories with five levels of retail, a hotel and record-breaking expensive luxury condos on top.
For all its inspiring visuals, investors who reviewed the early version of the Kushners pitch book noticed a conspicuous omission: numbers. The company circulated a revised pitch, complete with financials, and the scale of the debt and risk involved were jarring. With a $4 billion construction loan and a business model that assumed the condos would sell at the aggressive price of $9,000 per square foot, it was similar to the leap of faith the Kushners had taken by overpaying for the original building a decade earlier, just before the boom went bust. A simple downturn in high-end New York real estate and the colossal new building would be in a hole of titanic proportions.
In retrospect, it would be difficult to imagine a worse time for the Kushners to have entered Manhattan real estate. Pension funds, insurers and other blue-chip firms wanted in on a market that many believed would climb forever, and landlords were loath to sell. The combination of new demand and limited supply created frenzy over each transaction, doubling prices.
If that building was beginning to look obsolete at the time of purchase, it is totally obsolete now, says Jesse Keenan, a Harvard lecturer on architecture who wrote a 2013 report on the building for Kushner Cos. He notes that Manhattan is in the midst of its largest office-construction boom since the 1980s. The most prestigious occupantshedge funds, private equity and law firmsare moving west to new buildings, shifting the center of gravity away from the Kushners.
Even after all of these deals, the Kushners still havent touched the $1.1B principal (still owed and due in 2019).
Federal investigators know that Kushner met with then-Russian Ambassador Sergey Kislyak in Trump Tower last December and later met with Sergey Gorkov, head of the Kremlin-controlled VEB bank in two meetings that he didnt, at first, disclose publicly or on his application for his national-security clearance. After those meetings became public, Kushner and the White House said the contacts were made in his role as a Trump adviser and didnt involve discussion of his family business. But VEB and a spokesman for Russian President Vladimir Putin described the meetings quite differently, noted Adam Schiff of California, the top Democrat on the House Intelligence Committee. They said that Kushner was there in his capacity as head of his familys real estate business. Investigators say they are studying those accounts with keen interest.
I think it is part of a pattern of outreach to Russian financial interests, which are essentially Vladimir Putin and his oligarch circle, by Trump family members, said Senator Richard Blumenthal of Connecticut, a Democrat on the Senate Judiciary Committee. The financial dealings are important because we know that the Russian playbook is to engage and compromise foreign leaders. He added, Whether this meeting and contact are significant remains to be understood. With assistance from Billy House and Steven T. Dennis.
Angry Dragon
(36,693 posts)JNelson6563
(28,151 posts)Angry Dragon
(36,693 posts)blueinredohio
(6,797 posts)BigmanPigman
(51,584 posts)tanyev
(42,550 posts)A quick Google search revealed Jared and Ivanka wed in 2009; started dating sometime in 2007. I wonder if Jared had an ulterior motive.
dalton99a
(81,451 posts)Jared Kushner once broke up with Ivanka Trump because she wasnt Jewish
Couple split briefly in 2008, only got back together after Wendi Murdoch invited them for a weekend on her yacht, report says
By Eric Cortellessa | August 17, 2016, 8:26 am
According to a report in the August 22 issue of The New Yorker, the power couple, who met in 2005, briefly broke up in 2008 over religious differences, with Kushner, who is Modern Orthodox, pulling the plug.
The lingering issue was religion, the article said of the rupture. The Kushners hoped that Jared would marry a Jewish woman Donald Trump is Presbyterian, and Ivanka who in the documentary Born Rich appears wearing a necklace with a silver cross was not what theyd had in mind.
The breakup was short-lived, however. Wendi Deng Murdoch, then still the wife of media mogul Rupert Murdoch and a friend of the couple, invited the two for a weekend on the Murdochs yacht.
Shortly after, Kushner bought Ivanka a 5.22-carat diamond engagement ring and she went through a rigorous conversion process under the tutelage of Rabbi Haskel Lookstein at the Upper East Sides Congregation Kehilath Jeshurun.