Jared Kushner and other members of his family real estate firm have twice been caught using Kushner’s closeness with Trump as a means of peddling $500,000 deals that come with an inside track to a US visa.
Now Bloomberg has made it clear why Kushner was willing to risk running afoul of regulators. He really needs the cash.
Jared Kushner, Donald Trump’s son-in-law and top adviser, wakes up each morning to a growing problem that will not go away. His family’s real estate business, Kushner Cos., owes hundreds of millions of dollars on a 41-story office building on Fifth Avenue. It has failed to secure foreign investors, despite an extensive search, and its resources are more limited than generally understood.
In fact, Kushner’s financial situation is so precarious, that it might be driving more than just his efforts to sell Chinese investors on his ability to get Trump’s attention.
The mortgage on their tower is due in 18 months. This has led to concerns that Kushner could use—or has perhaps already used—his official position to prop up the family business despite having divested to close relatives his ownership in many projects to conform with government ethics requirements.
Like Donald Trump, it’s hard to determine just how much Jared Kushner is really worth. But the speed with which he’s been burning through other resources, and the desperation to make a deal with foreign investors, suggests that Kushner is in a very tight spot. Because the depth of the hole his company dug to buy this white elephant of a building is staggering.
It was 2006—the height of the real-estate market boom—when Kushner Cos. agreed to buy 666 Fifth Avenue for $1.8 billion, then a record for a Manhattan building. All of it was borrowed except for $50 million. The company still holds half of a $1.2 billion mortgage, on which it hasn’t paid a cent. The full amount is due in February 2019.
Kushner bought at the market peak, and hasn’t managed to either unload the building or secure additional partners. Instead, supporting 666 5th is causing the family to run through their remaining assets.
The family, once one of the largest landlords on the East Coast, sold thousands of apartments to finance its purchase of the tower in 2007 and has borrowed extensively for other purchases. They are walking away from a Brooklyn hotel once considered central to their plans for an office hub. From other properties, they are extracting cash, including tens of millions in borrowed funds from the recently acquired former New York Times building. What’s more, their partner in the Fifth Avenue building, Vornado Realty Trust, headed by Steve Roth, has stood aside, allowing the Kushners to pursue financing on their own.
And while it may seem that Kushner has billions in other real estate holdings, the truth is that many of these sites are little more than the kind of naming deals that his father-in-law often arranges.
One Brooklyn development site purchased in 2014 for about $75 million and heralded by the real estate press as “Jared Kushner’s big Gowanus project”—so-named for the canal it abuts—is in fact barely owned by the Kushners at all. SL Green Realty Corp., their partner in the endeavor, owns 95 percent of it, according to a regulatory filing. The remaining 5 percent is split between the Kushners, and LIVWRK, another developer.
The Kushner Group has already bailed from other deals and sold its remaining ownership in some buildings. But none of it seems enough to plug the hole at the center of the operation.
While Kushner, like Donald Trump Jr. and Paul Manafort, is dismissive of the June 2016 Trump Tower meeting with representatives of the Russian government, Trump’s son-in-law may have had a simpler reason to talk with the Russian representatives than the American adoption of Russian orphans that Trump offered as an excuse for the meeting. That reason is called “money.”
Federal investigators are examining Kushner’s finances and business dealings, along with those of other Trump associates, as they probe possible collusion between the Kremlin and the Trump campaign. Kushner has already testified twice before closed congressional committees and denies mixing family business with his official role.
After all, the June meeting was the only time Kusher had a chat with Russian representatives.
Federal investigators know that Kushner met with then-Russian Ambassador Sergey Kislyak in Trump Tower last December and later met with Sergey Gorkov, head of the Kremlin-controlled VEB bank in two meetings that he didn’t, at first, disclose publicly or on his application for his national-security clearance.
Representatives of VEB bank indicated that Kushner wasn’t in these meetings to secure a political deal for Donald Trump. They say he was there in an effort to secure a deal for his own real estate firm. And for once, that may be true.
This is a Creative Commons article. The original version of this article appeared here.