Jared Kushner Tried and Failed to Get a Half-Billion Dollar Bailout From Qatar
Source: Intercept
Not long before a major crisis ripped through the Middle East, pitting the United States and a bloc of Gulf countries against Qatar, Jared Kushner’s real estate company had unsuccessfully sought a critical half-billion investment from one of the richest and most influential men in the tiny nation, according to three well-placed sources with knowledge of the near transaction.
Qatar is facing an ongoing blockade led by Saudi Arabia and the United Arab Emirates, and joined by Egypt and Bahrain, which President Trump has taken credit for sparking. Kushner, meanwhile, has reportedly played a key behind-the-scenes role in hardening the U.S. posture toward the embattled nation.
Trump himself has unsuccessfully sought financing in recent years from the Qataris, but it is difficult to overstate just how important to Kushner the investment at 666 Fifth Avenue is for him, his company, and his family’s legacy in real estate. Without some outside intervention or unforeseen turnaround in the market, the investment could become an embarrassing half billion dollar loss. It’s unclear precisely how much peril such a loss would put Jared, or his family’s, finances in, given the opacity of their private holdings.
Anbang pulled out after the deal was criticized as a conflict of interest, given Kushner’s role in the White House. With Anbang, and its ability to secure a $4 billion construction loan, out, the Qatari condition wasn’t met, and the Gulf deal fizzled, according to a source in the region. That chain of events was disputed by a source who said said the deal between HBJ and the Kushners wasn’t dead, but on hold as the deal’s mix of loans and equity was reconsidered.
The revelation of the half-billion dollar deal raises thorny and unprecedented ethical questions. If the deal is not entirely dead, that means Jared Kushner is on the one hand pushing to use the power of American diplomacy to pummel a small nation while on the other his firm is hoping to extract an extraordinary amount of capital from there for a failing investment. If, however, the deal is entirely dead, the pummeling may be seen as intimidating to other investors on the end of a Kushner Companies pitch.
The Kushner’s purchase of 666 5th Avenue for a record breaking $1.8 billion in 2007 was capstone to an era marked by high prices and reckless amounts of debt. The Kushners invested $500 million in the building, and took out debt to cover the rest. But even at the height of a bubbling New York real estate market, there were clear signs that the price was too high and the debt was too much. The Kushners paid $1,200 a square foot, twice the previous per square foot record of $600, while records show that even with the building initially almost fully rented out, revenue only covered about two-thirds of family’s debt costs.
When the financial crisis hit, rents when down, vacancies went up and the Kushners were short on cash to pay their debts. They sold off the Fifth Avenue retail space for $525 million and used the proceeds to pay off non-mortgage debt on the building. Then in 2011, the Kushners sold off just under 50 percent of the building’s office space to Vornado, as part of a refinancing deal with the publicly traded real estate giant.
The $1.2 billion interest-only mortgage is due in February 2019. The office space is worth less than its mortgage and “there is no equity value” left in the office section of the building, Jed Reagan of Green Street Advisors told the New York Times in April. (Because they sold the retail space to make payments on other debt tied to the building, the office space is the only part of the tower the Kushners still have a stake in.) As a result, the family’s initial $500 million investment, once-heralded as an example of Jared’s emergence as a brash real estate star, has for now effectively been wiped out. A massive refinancing and construction of a new tower that dramatically increases the building’s value is one way to try get out of that hole.
Read more: https://theintercept.com/2017/07/10/jared-kushner-tried-and-failed-to-get-a-half-billion-dollar-bailout-from-qatar/
HOLIEST OF CORPORATE CORRUPTION FATMAN (Trump) !!
THE DEFECATION IS GOING TO HIT THE OSCILLATION BEFORE JARED COMES UP FOR AIR !!!!
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