Kushner Cos. will buy remaining stake in 666 Fifth Avenue from Vornado for $120M
Google Street View of 666 Fifth Avenue
Kushner Companies has agreed to purchase the remaining 49.5 percent stake in 666 Fifth Avenue from Vornado Realty Trust for $120 million, nearly wrapping up the drawn-out saga of the problem-plagued condo tower. According to the Wall Street Journal, Vornado said the contract with Kushner is expected to close in the third quarter of this year and is conditional and “there can be no assurance that this transaction will be completed.”
Kushner Cos. first purchased the 41-story building in 2007 for a record $1.8 billion, but the economic recession created enormous financial strain for the company. To help restructure the building’s major debt, they brought in Vornado, which purchased the stake in the building for $80 million and the assumption of half the property’s $1.2 billion mortgage in 2011.
Kushner Cos., run by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, is also in advanced talks to sell the 49.5 percent stake in 666 Fifth Ave to Brookfield Assett Management. If a deal is reached, Brookfield would provide millions of dollars for an overhaul of the building.
According to a statement released Friday by Vornado, the property’s existing mortgage loan will be repaid and the company will receive proceeds of roughly $58 million. Vornado will continue to own all of its retail after the deal closes.
As 6sqft reported last year, the occupancy rate at 666 Fifth Avenue had dropped to 70 percent and the the building’s net operating income fell to $41 million from $61 million in 2007. In addition to its debt and high vacancy rates, the building has been embroiled in controversy because of Jared’s role in the White House. While Jared divested in the property in 2017 to avoid conflicts of interest, investors have been reluctant to enter a deal with the Kushner family.
[Via WSJ]
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