Kushner Companies is ending plans to build an 80-story retail and luxury condominium tower at 666 Fifth Avenue, ending a years-long hunt for investors.
“It’s definitely not a knockdown,” Charles Kushner told the New York Times on Monday. “It’s definitely not the original plan.”
Sources told the Times that the company will likely renovate the office space and potentially convert the top floors into condos.
On Friday, Vornado Realty Trust announced that it had a handshake deal to sell its 49.5 percent stake in the tower’s office space to Kushner Companies, but the Times notes it is unclear who will finance the deal. The tower’s $1.4 billion mortgage is due in February. Real estate experts told the Times that even if Kushner Companies got a new mortgage at a lower interest rate than the current 6.3 percent, the firm would only be able to finance about 80 percent of the building’s value, roughly about $1.12 billion.
Last year, Kushner Companies came close to winning over Anbang Insurance Group as an investor in a $4 billion condo-retail-and-hotel development, which would have been designed by the late Zaha Hadid, but the deal fell apart. The Intercept reported that Charles Kushner also asked the government of Qatar for funding, raising concerns that he could be peddling his son Jared’s influence in the White House. Charles Kushner denied that he asked Qatar for funding, although he confirmed a meeting took place with the country’s minister of finance. The redevelopment Kushner Companies sought would have valued the building between $7 billion and $12 billion, with $4.5 billion in profits, at least according to the developer’s aggressive calculations.
The tower is currently 30 percent vacant, in part because Kushner Companies planned to empty it out for redevelopment. CBRE’s global chairman of brokerage Stephen Siegel told the Times it might cost around $200 million to renovate the property and make it competitive with office product in Hudson Yards, Downtown and Midtown East. “It’s an eminently leasable office building, if updated to modern standards, from the lobby to the elevators,” he said. [NYT] — Konrad Putzier