Kushners Unload 666 Fifth Ave. to Brookfield in 99-Year Lease
Brookfield Asset Management Inc. agreed to acquire the leasehold on the office portion of 666 Fifth Ave. in midtown Manhattan from Kushner Cos.
Toronto-based Brookfield said it was making the investment through one of its private funds, and its Brookfield Properties subsidiary will operate the building and launch a major redevelopment program and upgrade it. The terms of the deal weren’t disclosed in a statement Friday.
“Given Brookfield’s experience in successfully redeveloping and repositioning major office assets in New York and other cities around the world, we are well placed to capitalize on that opportunity,” Ric Clark, Brookfield Property Group’s chairman, said in the statement.
Brookfield is prepared to inject up to $700 million in equity and will essentially take control of the building unencumbered with a 100 percent leasehold, according to people with knowledge of the matter who asked not to be identified because the details are private. A Brookfield representative declined to comment.
The deal is a relief for Kushner Cos., which bought the 41-story tower for a record-setting $1.8 billion in 2007, making a splashy entrance to the Manhattan real estate scene. The transaction was funded with more than $1.7 billion of loans, and rapidly ran into trouble when property markets cratered following the financial crisis. In 2011, Vornado Realty Trust took a 49.5 percent stake as part of a deal to rework the massive debt load and stave off foreclosure.
Read more: The troubled history of the Kushners’ tower
The 41-story building lost $25 million last year and has almost always been unprofitable. Attempts to find other investors who would take a back seat to the Kushners in a redevelopment deal have come up short over the last couple of years. As a first step in its latest restructuring plan, Kushner Cos. said in June it would buy out Vornado Realty Trust, which owned 49.5 percent of the building. Vornado continues to own the retail portion of the property.
Jared Kushner, son-in-law of President Donald Trump, stepped aside from managing his family’s company when he became a senior White House adviser.
— With assistance by Sarah Mulholland
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