A property with a sign-of-the-beast address – 666 Fifth Avenue – was once the flagship of Kushner Companies, where the founder’s son, Jared Kushner, was CEO until he went to Washington to become an adviser to his father-in-law, President Donald Trump. Today, the New York Times reports, that flagship has become a costly liability.
Kushner Cos. once planned to raze the distinctive, aluminum-clad, 41-story skyscraper and replace it with a Zaha Hadid-designed, 80-story ultra-luxury tower. How do you spell h-u-b-r-i-s? Those plans have been scrapped, according to the Times, and the company has reached a “handshake” deal to buy out its partner, Vornado Realty Trust. With a staggering $1.4 billion mortgage soon coming due, Kushner Cos. now says instead of razing and replacing the building it will probably upgrade the office space at the base of the building and convert the top floors into condominiums.
It’s unclear where the money will come from. Stephen B. Siegel, chairman of global brokerage at CBRE Group, a real estate company, said of 666 Fifth Avenue: “It’s an eminently leasable office building, if updated to modern standards, from the lobby to the elevators.” But upgrades could cost $200 million, Siegel said.
As for luxury condominiums, Jonathan J. Miller, a residential real estate appraiser, said that the challenge is that “the high end of the residential market has been overbuilt since 2014.”
So what’s going to happen? “We don’t know what we’re going to do,” said Jared Kushner’s father, Charles Kushner, who’s running the company during his son’s excellent adventure in Washington. “We’re weighing our options.”
One thing is certain. Kushner Cos.’ search for an investor has been hampered by Jared Kushner’s current place of employment. “There’s a cloud because of the White House,” said Arthur J. Mirante, tristate president of Avison Young, an international real estate firm, and a friend of Charles Kushner. “A lot of people just don’t want to deal with it.”
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