666 Fifth avenue is owned by the Kushner Companies which was once headed up by Donald Trump’s Son-In-Law, Jared Kushner. He has since put his shares into a trust as he is working as a senior aid to the President and did not want there to be any conflicts.
One would think that with a Fifth Avenue address that 666 Fifth Avenue be considered a good place, and it is geographically, but financially it is a hot mess.
For starters it owes more than a billion dollars on a mortgage that is coming due very soon. In fact, should Donald Trump avoid being impeached and bumped out of office, the mortgage will become due while Trump is still the president as it is due in just 2 years. That is a huge chunk of money to refinance when the real head of Kushner Companies is not involved at all.
On top of that the place is largely empty. A staggering 30% of the offices are unoccupied and that is killing the cash flow and causes the value of the building to be diminishing as opposed to increasing in value. The reason they are empty is because Jared Kushner himself did not want to lease them out in the hopes of redeveloping the building. He was hoping to add in luxury condos, a shopping atrium and a hotel all inside a super tall skyscraper.
That would be so expensive the amount of money involved to accomplish that would make even the richest stagger a bit. Total estimated cost of that – 6.6 Billion Dollars. That is 6,600,000,000 USD with 2.5 Billion up front and a gigantic 4.1 Billion dollar construction loan.
These are dollar amounts that don’t just show up on your local realtor’s website and may not make sense even in that pricy piece of New York City.
But let’s say the numbers are doable and make sense as the business plan is all laid out and things will fall into place successfully.
Will those that get involved and finance the “improvements” on 666 Fifth Avenue expect some sort of Quid Pro Quo? Wouldn’t you expect some special treatment from the people you were financing when the dollar amount goes in the billions? The problem is that the person that has all the juice sits at the right hand of the President of The United States and the amount of influence he has with said president is huge.
Let’s look at some history of this piece of New York real estate while we are at it.
While Jared’s Father was serving time in a Federal Prison for a white collar crime, Jared bought the property for 1.8 Billion Dollars. Odds are he talked with his father before signing a purchase agreement on a piece of property that was almost twice as high per square foot than any previous NYC real estate, so this is not some mistake that a young man made without getting counsel for the patriarch of Kushner Companies.
The majority of the money was borrowed so there was certainly thinking that the building would be able to handle a huge note and have a positive cash flow even at those numbers. The previous owner did not do too bad on the sale as he “only” paid 518 million for it and probably bought it with the intent to flip it at some point but I’m sure he did not envision an opportunity to triple his money on the deal.
But wait there is a twist to this that you may find quite interesting and it involves the President himself.
In 2011 Jared Kushner sold part of 666 Fifth Avenue off to a company called Vornado and the company that comes into this project would have to buy out Vornado to get the new deal financed properly. Who runs this Vornado you ask?
A man named Steven Roth is the head honcho there and just so happens to be a partner with The Trump Organization on a property just a few blocks away.
This is surely an opportunity for some things to fall through the cracks and entangle politics and business on a level with which no one is familiar.