Kushner Companies’ retail condominium at the old New York Times building could be facing challenges in the wake of Guy Fieri’s restaurant closing, according to a new report.
Guy’s American Kitchen & Bar, a yet-to-be opened food hall run by celebrity chef Todd English and a space showcasing a miniature Manhattan that was behind on its rent combined to account for $9.9 million in annual rental income at 220 West 44th Street, Bloomberg reported.
When Kushner landed a $285 million loan from Deutsche Bank in 2016 to refinance the property, underwriters estimated that the retail space would generate $24 million annually when fully occupied. Operating costs and interest payments amount to about $22 million per year, according to Bloomberg, leaving the landlord at risk of losing money if some of the tenants stop paying rent.
Fieri’s 15,000-square-foot restaurant closed on Dec. 31. A Kushner spokesperson argued the restaurant closing is actually a boon for the property, claiming that it could replace the tenant at a higher rent. “A restaurant which had a below market rent agreement surrendered their keys and vacated the space,” the spokesperson told The Real Deal. “We now have written offers at the higher market rate. Hardly a bad fact. The new well known tenant will only create more value by attracting even more visitors.”
Gulliver’s Gate, which operates a 49,000-square-foot space showcasing miniature building models, is two months behind on its rent, according to loan documents cited by Bloomberg. A company spokesperson told the news outlet that it is “is up to date on their rent and paid in full on their lease.”
A Kushner spokesperson told TRD that Gulliver’s Gate “was not put in default of their lease as Bloomberg wrongfully claims. They were a few days late but are current on all payments.”
Kushner bought the property at 220 West 44th Street for $296 million in 2015 from Africa Israel. A year later the company refinanced the building with the Deutsche Bank loan and $85 million in additional debt from SL Green Realty and Paramount Group. The property lost money in the first nine months of 2017, according to Bloomberg, in part because of newly signed tenants’ free-rent periods. [Bloomberg] — Konrad Putzier