The Kushner family’s plans to transform an aging office tower on New York City’s Fifth Avenue are falling apart.
The Kushners bought the tower at 666 Fifth Avenue at the height of the real estate market in 2007. But it became a financial burden when real estate prices collapsed, losing millions of dollars each year and remaining nearly one-third vacant. The building is heavily in debt, with a $1.2 billion mortgage due in February of 2019. According to Bloomberg, the building is on track to lose $24 million this year, in part due to a rise in the interest rate of the building’s mortgage.
The Kushner Companies, owned by first-son-in-law Jared Kushner’s family, planned to demolish the building and replace it with what was to be the crown jewel of the family’s real estate empire. They envisioned a glittering spire with luxury condominiums, a hotel, a high-end shopping mall, and up-to-the-minute, fashionable office space.
Now their partner, Vornado Realty Trust, is effectively undermining those plans. According to Bloomberg News, Vornado is telling brokers to plan for a much more mundane renovation. Instead of demolishing the building, Vornado’s plans would rent out the vacant space at current market rents, Bloomberg reports. Vornado owns 49.5 percent of the building.
A Kushner Cos. spokesman told Bloomberg nothing has been decided yet.
The building has become a lightning rod for controversy ever since Jared Kushner took a role in the Trump administration. A planned investment from China’s Anbang Insurance Group, which would have garnered the family a $400 cash payout, fell apart amid public outcry over conflicts of interest and a crackdown on overseas investments by China’s government. Other international investors have also been scared away by the potential for controversy, according to people familiar with the matter.