Kushner Companies is no longer in talks with the Chinese investor that was going to help them redevelop the $7.5 billion tower located at 666 Fifth Avenue.
On Tuesday, March 28, a spokesman for Kushner told the Post, “Kushner Companies is no longer in discussions with Anbang about 666 Fifth Ave.’s potential redevelopment, and our firms have mutually agreed to end talks regarding the property.”
However, the revolutionary plan is far from being dead. Charles Kushner led Kushner Companies is out looking for new financial backers to recreate the 1,400-foot-tall tower that will be renumbered 660 Fifth Avenue, to eliminate the bad omen many people feel surround the number 666.
Even though the Chinese insurance company, Anbang, has dropped out of the project, The Post’s sources say that many other financial backing partners of stepping up in its place. The spokesman from Kushner said, “Kushner Companies remains in active, advanced negotiations around 666 Fifth Ave. with a number of potential investors.”
“With Jared Kushner focused on his White House job — and no one wants to interfere with that mission — everyone at the Kushner firm, from father Charles to mom Seryl Kushner, and Laurent Morali, firm president, are maintaining a Chinese wall when it comes to investors. The negative press that besieged both Kushner and Anbang made it clear they could not move forward together on the deal,” reports The Post.
A source told The Post, “Now, the Kushners are weighing [each potential investor] and whether there is a conflict or even a perceived conflict.”
According to the source, although Kushner Companies may an international investor in the end, company is avoiding foreigners with extensive US business as well as sovereign wealth funds.
Back when it was unlikely that Donald Trump win the US presidential election, the company was talking about getting international conglomerates and sovereign wealth funds to invest approximately $500 million. Now that the tides have turned, “they are telling them ‘No.’ ”
The current loan for $1.2 billion has already been offered to be paid off with funds supplied by two local banks. The source told The Post, “It is not over-leveraged because it comes to $758 per square foot.” This is at a time when space in office towers in Midtown Manhattan is selling for around $1,200 per square foot.
According to The Post, “While construction planning is under way, there are also two- and one-year options to extend the payoff. The total $7.5 billion new project cost would include $2.5 billion of equity, $850 million of preferred equity and $4.15 billion in actual construction costs. A number of contingencies are already in the works. Steve Roth’s Vornado Realty Trust would be bought out of its office and retail condos. Although some reports have derided the building’s declining occupancy, this works in their favor. That’s because the dozen remaining office and retail tenants, such as Colliers International, also need to be bought out of their leases. Zara parent Inditex owns its retail space, is cooperating and will get more space.”
In about five to seven years, Kushner will be able to offer unit with clear views in the tower that will take up an entire blockfront between West 52nd and 53rd streets. In line with the upper-middle to top pricing range of the market, space in the development would go for around $6,000 per square foot.
The project plans to have the bottom nine levels for small retail shops with a food hall on top, and above that will sit a 94-key, seven-star hotel with banquet rooms.
By Charles Bernstein