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Sandro Rosell
FC Barcelona President
Saturday, October 21, 2017

Kushner Companies’ is still recovering from a risky deal it made in 2007, which used a very unique appraisal so that it didn’t seem like such a gamble to the bond investors on paper. This deal was the company’s record $1.8 billion acquisition of 666 Fifth Avenue, which was funded using $1.75 billion in debt.

According to The Real Deal’s review of a bond prospectus, at the time of the acquisition, the office portion of the property was valued at $2 billion on its own by appraisers. This would make the value of the tower as a whole, without any fundamental changes and within two months of the deal’s closing, worth nearly $3 billion, which is about 70 percent more than the record price paid by Kushner. 

TRD reports, “Industry sources say such a big gap between purchase price and appraisal is virtually unheard of. Why it came to be is a mystery. UBS and Barclays, who provided the financing, declined to comment. Kushner Companies did not respond to a request for comment. Several sources involved in or familiar with the financing claimed they do not recall who appraised the tower, and even to say that, they requested anonymity.

The 666 Fifth deal is now seen as emblematic of the heady, overleveraged plays made during the height of the market in 2007. Purchase prices were based largely on predictions of future income that assumed a dramatic increase in rents, while actual cash flows took a backseat. Much has been written about the property, which continues to be in the spotlight as special counsel Robert Mueller is looking into Jared Kushner’s finances. But the appraisal that enabled Kushner to borrow such a sum to begin with, a sum that became the firm’s albatross, hasn’t been examined until now.”

A full break down of the appraisal of 666 Fifth and how the operations played out can be seen in The Real Deal’s complete article at

By Mark Snyder