One of New York City’s most prized office towers is looking to put its troubled history behind it. Anbang, the same firm behind the conversion of the Waldorf Astoria Hotel, is looking to purchase a major stake in the 41-story building at 666 Fifth Avenue, Bloomberg has learned. Anbang Insurance Group is a massive Chinese firm that deals with financial services and banking and also previously attempted to acquire the Starwood Hotels and Resorts Group.
Kushner Companies purchased the building back in 2007 for $1.8 billion—a record purchase for an office building at the time. The financial crisis that hit the following year made the building a losing bargain for the Kushners, until Vornado Realty Trust stepped in to save the day in 2011. At that time, Vornado purchased a nearly 50 percent stake in the office section of the building, and bought out the retail component the following year.
In 2015, it was reported that Jared Kushner, who was still a part of Kushner Companies at the time (he stepped down earlier this year), was in talks with Steve Roth, the head of Vornado, to restructure the building into a 1,400-foot condo and hotel with a large retail component. According to the New York Post, Roth was not on board with that plan, and the paper is now reporting that the condo tower plan is back on after Anbang’s investment. (Kushner Companies hasn’t confirmed this.)
Through the deal with Anbang, Kushner Companies will get $400 million in cash, according to The Real Deal. The firm will continue to maintain a 20 percent stake in the building, while Vornado will walk away from the deal with “a 10-fold payout on its stake in the building’s offices and a doubling of its investment in its stores,” according to Bloomberg.
Talks for the deal became evident when Bloomberg got its hands on materials (EB-5 financing) intended to attract overseas investors to the project. The negotiations may lead to a federal review like it did when Anbang was looking to purchase the Waldorf Astoria.
If this deal moves forward, the building will be valued at $2.85 billion, the largest sum for a single tower in Manhattan. Anbang is also seeking a $4 billion construction loan for the project to convert the upper floors into condos—that too would be the largest loan approved for a single property, according to TRD.
Bloomberg reports that some ethics experts have questioned whether Jared Kushner has taken enough measures to distance himself from his family business since he assumed his White House advisory role. Anbang’s ties to the Chinese government have also been questioned in the past—so much so that President Obama refused to stay at the Waldorf Astoria after Anbang purchased it, over fears of spying. As a result the deal around 666 Fifth Avenue is likely to be heavily scrutinized.
A spokesman for Kushner Companies issued the following statement to Curbed:
“Kushner Companies is in active discussions around 666 Fifth Avenue, and nothing has been finalized.”
- Kushners Set to Get $400 Million From Chinese Firm on Tower [Bloomberg]
- Kushner’s $2.9B condo deal with Chinese insurer moves forward [NYP]
- Anbang to buy stake in Kushner’s 666 Fifth, valuing tower at $2.85B [TRD]
- Midtown Might Be Getting Another 1,400-Foot Tower [Curbed]
- Jared Kushner steps down as CEO of Kushner Companies [Curbed]