Jared Kushner's Family is Screwed, And It's All Boy Wonder's Fault [View all]

[KelleyKramer]

JARED KUSHNER’S FAMILY IS SCREWED, AND IT’S ALL BOY WONDER’S FAULT

His big real-estate deal has gone from bad to worse.

BY BESS LEVIN
OCTOBER 16, 2017 12:20 PM

https://www.vanityfair.com/news/2017/10/jared-kushners-family-is-screwed-and-its-all-boy-wonders-fault?



In Trump’s eyes, Kushner is a genius businessman who will not only achieve a feat that has escaped U.S. presidents and career diplomats alike, but will also solve the opioid crisis, overhaul the government’s I.T. infrastructure, and “reinvent the entire government.” Given his track record, however, it’s unclear whether Kushner is even qualified to work as a White House intern—his only two professional achievements of note have been buying and running a newspaper into the ground and running his family’s real-estate business while his father was in prison, striking a deal that a decade later is still haunting his family.

That deal, of course, was to buy 666 5th Avenue for $1.8 billion on the eve of the financial crisis, which has become an ongoing albatross around Kushner Cos’ neck. With a 30 percent vacancy rate, an expected loss of $24 million this year, and a $1.2 billion mortgage that is due in February 2019, the Kushners want to raze the property and replace it with a glimmering Zaha Hadid-designed tower that would require borrowing even more money—including a $4 billion construction loan. Their Hail Mary plan is a problem not only because their attempts to raise funds have been rebuffed by everyone from the richest man in France, to Israeli insurance companies and banks, to South Korea’s sovereign-wealth fund, to China’s Anbang Insurance Group, but because, according to a new report from Bloomberg, even the family’s partner in the venture is actively trying to shut it down:

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.

In fact, Roth, who has said 666 Fifth “would be worth a lot more if it was just dirt,” is reportedly so disenchanted that he’s sending a message to anyone who might still be interested in the Kushners’ plan to “back off.” As Bloomberg notes, while “the success of Trump’s campaign drew investors into discussions” for 666 5th, raising concerns about potential conflicts of interest, heightened scrutiny plus “financial assumptions for the project that most found to be unrealistic” have resulted in no one wanting to come near the Kushners’ tower with a 100-foot pole.


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