The company run by Jared Kushner’s family is close to getting a bailout of its troubled flagship tower in Midtown Manhattan by a company tied to Qatar’s government.
NEW YORK — The company controlled by the family of White House adviser Jared Kushner is close to receiving a bailout of its financially troubled flagship building by a company with ties to the government of Qatar, according to executives briefed on the deal.
Charles Kushner, head of the Kushner Cos., is in advanced talks with Brookfield Properties over a partnership to take control of the 41-story aluminum-clad tower 666 Fifth Ave., in midtown Manhattan, according to two real estate executives who have been briefed on the pending deal. Brookfield is a publicly traded company, and its real estate arm, Brookfield Property Partners, is partly owned by the Qatari government, through the Qatar Investment Authority.
Kushner and his son Jared, President Donald Trump’s son-in-law and one of his key advisers, bought the office tower 11 years ago for a record-setting $1.8 billion. But the building today generates only about half its annual mortgage payment, and 30 percent of the 41-story tower is vacant.
In late 2016, Kushner and his son were close to a much different kind of deal with Anbang, a giant Chinese insurance company with ties to the country’s ruling elite, and with a billionaire from Qatar, Hamad bin Jassim Al-Thani, the country’s former prime minister.
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But the deal collapsed a year ago, amid criticism from legislators over the connection between Jared Kushner’s political role and the family business. Jared Kushner left the family business after Trump’s election and is now a key adviser to the White House.
The Kushner Cos. declined to comment. Both Brookfield and the Qatar Investment Authority, the sovereign fund of the oil-rich Middle Eastern emirate, said the Investment Authority had no knowledge of the deal. A spokesman for the Investment Authority said the fund “has no involvement whatsoever in this deal.”
But the Qatar Investment Authority is the second-biggest investor in Brookfield Property Partners.
The deal with Brookfield is likely to raise further concerns about Jared Kushner’s dual role as a White House point person on the Middle East and a continuing stakeholder in the family’s company. Jared Kushner this year lost his top-secret security clearance amid concerns that foreign governments could attempt to gain influence with the White House by doing business with the Kushner Cos.
In January, The Times reported that the firm last year received a $30 million investment from Menora Mivtachim, a large Israeli insurer, just a few days before Jared Kushner flew to Israel for his first diplomatic trip to the region.
Although he resigned as chief executive of the company when he joined the White House in January 2017, Jared Kushner retained most of his stake in the firm. He shed some of the assets — including his stake in 666 Fifth Ave. — by selling them to a trust controlled by his mother. His real-estate holdings and other investments are worth as much as $761 million, according to government ethics filings.
Peter Mirijanian, a spokesman for Kushner’s lawyer, Abbe Lowell, said, “In consultation with the Office of Government Ethics, Mr. Kushner has had no role in the Kushner Cos.” He said Kushner “divested himself from the 666 Fifth Avenue building before joining the government. He is walled off from any business or investment decisions and has no idea or knowledge of these activities.”
The Qatar Investment Authority bought a $1.8 billion stake in Brookfield Property Partners in 2014, and is the second-largest investor in the company, ranking behind only Brookfield Asset Management. And the Qatar fund and Brookfield have teamed up on several real estate deals in the United States and elsewhere in recent years. Brookfield and Qatar also control the Canary Wharf office complex in London.
The Qatar Investment Authority is one of the world’s largest sovereign funds, with $320 billion in assets under management, according to the Sovereign Wealth Fund Institute. In 2015 the fund announced plans to invest $35 billion in the United States, and it has since become a sizable commercial real estate investor, taking part in roughly $7 billion in real estate deals and buying properties around New York and Los Angeles, according to CoStar Group, a research firm.
Brookfield, which will take over leasing and operating 666 Fifth, plans to spend hundreds of millions of dollars to give the 61-year-old building a major face-lift: stripping off the distinctive aluminum facade, installing floor-to-ceiling windows, renovating the lobby and installing new elevators, according to the executives.