One of New York's largest property owners said this week it would sell its minority stake in a Manhattan office tower on Fifth Avenue controlled by the family of President Donald Trump's son-in-law, Jared Kushner.
Steven Roth, chairman and chief executive of Vornado Realty Trust, told analysts on a conference call that the real estate investment trust has "a relatively small investment in the property, which we expect to get back."
Vornado said in its annual report on Monday that it had reclassified its 49.5 percent stake in the office portion of 666 Fifth Avenue because it did not intend to hold the asset on a long-term basis. No other information was provided.
According to Bloomber, the building's $1.2 billion mortgage is due in February 2019, a deadline that has triggered a global hunt for investors. Bloomberg adds, "the company hoped to knock the building down and put up another, twice as tall, in its place. It sought funds from investors in Saudi Arabia, Qatar, China, South Korea, Israel and France. No investors have been announced for the plan, described by many as prohibitively expensive."
"We basically believe that the returns and the structure and the time is such that we would rather exit than stick it out. It's pretty much as simple as that," Roth said on Tuesday.
Politico reported Tuesday, sourcing from Trump’s financial disclosure forms that Kushner has three credit lines, which have increased their limits to a range of $5 million to $25 million.
Jennifer Rubin from the Washington Post tweeted about the political ramifications on the recent Politico report, "The fact that Kushner, without full security clearance, is permitted to peruse the President’s Daily Briefing. . . makes all of Kushner’s financial obligations and debts urgent threats to our national security. This situation is unconscionable.”
Roth said in August 2017 that the fate of the 41-story flagship property of Kushner Cos, a developer and landlord founded by Jared's father, was still being debated. Jared sold his interests in the realty company to a family trust in January 2017.
Kushner Cos acquired the building with a full block of prime Fifth Avenue retail frontage in 2006 for $1.8 billion, the most ever paid for a New York office tower at the time.
The 1.4 million square foot tower ran into difficulties during the recession and Kushner later refinanced $1.215 billion in debt, which comes due in February 2019. The debt has since ballooned to $1.448 billion, according to the annual report.
Vornado acquired its minority stake in 2011, when it helped recapitalize the tower with $70 million. A year later it bought retail space for $707.8 million.
Politico estimated that Jared and Ivanka Kushner's combined total debts has soared in the past year from a range of $19-98 million to a range of $31-155 million.
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