A motive- Inside the Troubled Kushner Tower: Empty Offices and Mounting Debt

[DemocratSinceBirth]

The Manhattan tower co-owned by the family of Jared Kushner, President Donald Trump’s son-in-law, has been losing money for three years and faces increasing loan fees in 2017, which may explain why the family has been negotiating with Chinese insurance behemoth Anbang on new financing.

The fees, at 666 Fifth Avenue, kicked in last month and escalate with each payment until the loan is repaid, a 2011 refinancing agreement shows. December brings another hurdle: Interest paid on the bulk of about $1.1 billion of loans jumps to 6.35 percent, more than double what it was after the debt was refinanced in 2011.

And as the city’s biggest office construction boom in a quarter century creates a glut of supply, the property’s occupancy rates are falling. Seventy percent of the building was filled as of September, filings by LNR Partners, the loan managers, show. This is well below 91 percent for the New York metro area reported at year’s end by Reis, the market-data firm, said Bloomberg Intelligence analyst Jeffrey Langbaum.

“It is an understatement to say this building is not doing well,” said Joshua Stein, a New York real estate lawyer, after reviewing its financials and the refinancing agreement. “People forget that not all real estate investments succeed. But people also forget that failing real estate investments are sometimes successfully turned around.”

https://www.bloomberg.com/news/articles/2017-03-22/kushners-troubled-tower-debt-empty-offices-and-rising-fees

[gratuitous]

1. Failing investments are sometimes turned around

But probably not when one of the principals is out of state working without pay at another job full time. With such a low occupancy rate in a glutted market, how likely is it that the building will generate sufficient income to pay its debts? What legitimate lender is going to extend credit to such an unattractive prospect?

[DemocratSinceBirth]

2. My gf is an assistant controller.

Her boss inherited a $100 million dollar property and sold it. To avoid the tax hit he brought several smaller properties. It also reduced his exposure by diversifying.

I am not a real estate mogul but it doesn't seem prudent to allow yourself to be exposed like Jared.

The FBI is investigating whether he promised the easing of sanctions in return for loans at favorable rates. What folly if he did.

[erronis]

22. Depends on what you mean by "legitimate". Several groups are known to have unlimited finances

Anything that has to pass through the S.W.l.F.T system is probably 80% legitimate. But there is a lot of cash and assets that can be traded without reporting to anyone. And, unless my memory is faulty, there are a lot of US greenbacks still being produced overseas. I'm sure some of the larger states have great printing presses.

[underpants]

3. so throwing every penny of winnings right back on the table wasn't a good idea...

As in the Kushner corp had a $1B windfall and Jared decides to put it all into one building, which was a $2B sale, going right back into debt AND these were the terms he got? Balloon payments???

Yeah. He's super spiffy smart that one is.

[DemocratSinceBirth]

9. The prudent thing to do was to buy a bunch of properties and spread the risk.

But that isn't as gratifying to the ego.

[underpants]

14. Yes and yes

But hey, I'm no super smart high finance guy

[KPN]

4. Yup. Sign on the Trump White House:

"Open for Business"

[erronis]

23. That immediately gave me the frightening image of goat-see....

[pnwest]

5. Jeez. Could it really be that the reason

for all of this turmoil is as simple as this? Trying to get "funding" from Russians to bail out Jared's punk ass from a failed real estate deal? Words fail me.

[mhw]

8. I believe you've just summarized this entire presidential power grab in one succint paragraph

This whole charade is exactly what you describe.

Its always been about the trumps.
They promised the players in congress & his cabinet untold payoffs for covering their loser behinds.

Wow

[pnwest]

10. Im just gobsmacked. At a complete loss

to describe - or even begin to sort out! - my reaction to this realization.

[DemocratSinceBirth]

12. Carl Icahn would swoop in and save the day but only if he can get it for ten cents on the dollar.

[mhw]

13. and that's being generous by Ican's standards.

Multi headed snake and follow the money to reveal each one.
Its pretty damn insane.

[Alice11111]

16. Could be, but only if he could avoid being caught up in

the firestorm. He's way smarter and more experienced than this pampered Kushner.

[erronis]

24. I think you're all onto the real thread. Thanks and keep it up!

[samnsara]

6. I always thought he was the anti christ..666 5th Avenue??

[VMA131Marine]

7. 666, it's a number...

Comes after 665!

[WinkyDink]

19. Jared was obsessed with its purchase. Why, when he was told it was a bad investment?

6.6.6. Is why.

YOU don't need to care; it's enough that HE does.

[JHB]

32. No it doesn't...

665 is across the street.

[kcr]

25. I thought someone was making a joke the other day with that address

But now I see, that's the actual address.

[C_U_L8R]

11. Like father in law, Like son in law.

The Trumps sure know how to tank a business.

[dalton99a]

15. And make other people suffer for it

[Alice11111]

18. Why would we expect anything different? He had a proven

resume. It's just worse than we thought. I hope the US doesn't have to declare BK. After DTs world tour, thete goes my T bills. No one will look to us as a safe haven for their savings now. Maybe, Germany is a better place to save one's money.

[WinkyDink]

20. Old man Kushner went to prison, let us not forget.

[WinkyDink]

17. OF COURSE these men are traitors for dollars! Their lives' raison d'etre is MONEY, BABY.

What it don't get, they can't use.

[Bernardo de La Paz]

21. Boils down to lots of racist fundy christians backing a jew at 666. Shows what they'll sell out for.

They are willing to forgo their own racism against jews for a bigger slice of racism against brown-skinned immigrants.

They are willing to back a non-church-going cardboard cutout real-estate magnate and real-estate son-in-law for a bunch of broken promises; promises that were obviously going to be broken.

They are sheep in more ways than one.

[benpollard]

26. Maybe Jared is Damien all grown up

... actually, Trump would be the right age.

[erronis]

27. Throw in a filter against females, LGBT, non-European, poor/middle, compassionate, liberal,

Etchetera, etchetera. And you get about 10 rich old men that pop ED drugs all day long.

That's the face of the USofA.

[demigoddess]

28. so much for them being 'successful businessmen'.

owing millions and always scrounging around for loans is not my definition of successful. That is not the way normal people in the middle class are supposed to behave.

[Tommy_Carcetti]

29. That's what happens when you sell your soul to the devil. Nt

[flamingdem]

30. 666 - The mark of

the idiot.

[lapfog_1]

31. All he needs is $6M a month in rent

plus another $1M or so to cover operating and local taxes.

No problem... they are all billionaires... right? right?