By Peter Grant
Kushner Cos., the real-estate business owned by the family of senior White House adviser Jared Kushner, is moving its headquarters out of the office tower at 666 Fifth Ave., the tower at the center of the Kushners' push into the Manhattan real-estate market just before the 2008 crash.
Kushner Cos. is moving to the top floor of the General Motors Building on the southeast corner of Central Park, one of the most coveted office addresses in the city, according to people familiar with the matter. The family has been looking for new Manhattan digs following its distressed sale of control of 666 Fifth Ave. to Brookfield Asset Management in the summer of 2018.
Brookfield, which valued the deal at $1.29 billion, last year launched a $400 million overhaul of the 39-story building which was built in the 1950s. As part of that overhaul Brookfield has been vacating 666 Fifth of tenants including Kushner Cos., which occupies about 15,000 square feet in the tower.
The move comes as the commercial real-estate industry, like most businesses, has been in upheaval as a result of the Covid-19 pandemic. Tenants are falling behind on rent payments, landlords are defaulting on loans and investors are looking for steeply discounted prices.
Kushner Cos. has closed one discounted acquisition. In April, the company purchased a $30 million loan backed by a Brooklyn apartment building sold by SL Green Realty Corp., New York's largest office building owner. The real-estate investment trust has been trying to shore up its balance sheet in the wake of a collapsed Manhattan property sale. Kushner paid about 90 cents on the dollar, according to people familiar with the matter.
Kushner Cos. is subleasing 20,500 square feet of space on the 50th floor of the General Motors Building for 10 years from Itaú Unibanco Holding SA, Brazil's largest bank. Kushner is paying about $100 a square foot, about half of what Itaú is paying, according to people familiar with the matter. A representative for Itaú didn't respond to a request for comment.
Kushner Cos. was based in New Jersey before it purchased 666 Fifth Ave. in 2007 for what was then a record price of $1.8 billion. The highly leveraged deal ran into trouble when the global financial crisis hit, sending Manhattan rents and occupancies plummeting.
The Kushner family's efforts to salvage their investment in 666 Fifth Ave. became a lightning rod for critics of the Trump administration. They alleged that some of the investors that showed an interest in investing in the troubled property, such as Anbang Insurance Group Co. of China, may be doing so to curry favor with Jared Kushner, who is the husband of Mr. Trump's daughter, Ivanka, and his father-in-law.
Mr. Kushner sold his stake in 666 Fifth and other assets to a trust controlled by other family members to avoid potential conflicts after joining the Trump administration.
The financial problems facing the building were solved by the Kushners' sale of a 99-year lease of the property to a venture controlled by Brookfield. The Kushners retained an interest in that venture but Brookfield is in charge of the building's redevelopment and is changing its name to 660 Fifth Avenue.
Write to Peter Grant at email@example.com