Plan for $7.5 billion Kushner family New
York tower faces hurdles: report
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[March 23, 2017]
NEW YORK (Reuters) - The
family-owned company that until recently was headed by U.S. President
Donald Trump's son-in-law hopes to turn an aging New York office tower
into a signature development that could be worth up to $12 billion, a
report said on Wednesday.
Chinese insurer Anbang Insurance Group is in advanced talks to provide
as much as half of $2.5 billion in equity for the planned redevelopment
of 666 Fifth Avenue, the Wall Street Journal reported.
The overall project for the flagship 39-story building, which is
controlled by Kushner Cos, is valued at $7.5 billion. The company was
run by Jared Kushner, who is married to Trump's daughter Ivanka. He sold
his stake to a family trust in January.
Extensive talks are under way between Kushner Cos., its partners in the
building, potential investors, lenders and tenants who would have to be
paid to move for the project to go forward, the Journal said, citing
people close to the deal.
Plans call for stripping the structure down to its steel columns and
adding about 40 floors to the building, which was built in 1957. The
project was designed by Zaha Hadid, a Pritzker Prize award winner for
architecture, before she died last year.
Concerns about a conflict of interest given Jared Kushner's role as an
advisor to Trump could halt Anbang from taking part. Anbang last week
said it was not investing in the project after Bloomberg News named the
firm as a potential investor.
Kushner Cos believes it could gain the necessary equity from other
investors if Anbang decides to exit the transaction, the Journal said.
The project faces other hurdles.
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Passers-by walk near the office building at 666 Fifth Avenue in New
York December 7, 2006. REUTERS/Keith Bedford
The Kushners would have to buy out the building's current tenants to
allow for domolition to start and an existing $1.15 billion in debt
would need to be refinanced.
Talks are under way with Vornado Realty Trust, a real estate
investment trust that owns 49.5 percent of the building's office
space and much of the property's retail space, to buy out its
interests, the Journal said.
The need to sell the luxury condo units at near record prices and
the overall financing for the project could raise the eyes of the
U.S regulators, a banking source said.
(Reporting by Herbert Lash)
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