The Atlanta Journal-Constitution
No N.Y. skyscraper deal for Kushners, Chinese
Talks end on $4B venture with family of Trump son-in-law.
A Chinese company with ownership ties to some of the Communist Party’s leading families has ended talks to invest billions of dollars in a Manhattan office tower owned by the family of Jared Kushner, President Donald Trump’s son-in-law and a senior White House aide.
The Chinese financial conglomerate, Anbang Insurance Group, and the Kushner Cos. “mutually agreed to end talks regarding the property,” a Kushner Cos. spokesman said in an emailed statement Wednesday. The development came days after Democratic lawmakers wrote letters to the Office of White House Counsel and Treasury secretary, expressing concern that the possible deal could breach federal ethics rules, and as Trump is preparing to meet Xi Jinping, China’s president, for their first summit at Trump’s Mar-a-Lago resort in Florida.
The possible $4 billion deal between the two companies would have paired a company led by a man who married the granddaughter of China’s late paramount leader, Deng Xiaoping, with the family company of Kushner, a principal White House adviser on foreign affairs, including China policy.
Any deal faced headwinds on both sides of the Pacific Ocean. In the United States, it was subject to increasing scrutiny by lawmakers, who also called on the government committee that reviews overseas investment to scrutinize the agreement for possible national security issues. In China, government regulators are trying to stanch the loss of foreign exchange reserves and are wary of signing off on multibillion-dollar deals in industries, such as commercial real estate, not deemed to have strategic value.
Plans for the redevelopment, which envisioned gutting the aging office tower and erecting a soaring glasssheathed tower with luxury residences, a hotel and retail spaces designed by the late architect Zaha Hadid, will now require a new investor.
“Kushner Companies remains in active, advanced negotiations around 666 Fifth Avenue with a number of potential investors,” the company spokesman said in a statement.
A spokesman for Anbang declined to comment.
Jared Kushner was the company president when the plan to redevelop the family’s flagship building, which serves as the company headquarters, was drawn up. On Jan. 19 he stepped down from that role and he has since sold his stake in the building to a family trust.
“Fifth Avenue is synonymous with luxury and opulence of the highest standards in the world,” Kushner wrote in a brochure for the project. “This design will transform Fifth Avenue in a city that is continuously reinventing itself.”
But the Kushners’ plan to transform 666 Fifth, a 41-story aluminum-clad office tower into a bullet-shaped, 74-story luxury skyscraper required billions of dollars, many years of development and a leap of faith from investors.
The family paid a record-setting $1.8 billion for the tower in 2007, in a move that the Kushners hoped would symbolize their transformation from an operator of suburban garden apartments to a major real estate player in Manhattan, the most lucrative and treacherous market in the country.
But the cash flow from 666 Fifth only covered two-thirds of the annual debt service on the property. The Kushners quickly ran into financial problems; instead of heading steadily skyward, the real estate market and the country fell into a steep recession.
“History has looked back on it as one of the more frothy top-of-the-market deals,” said Jed Reagan, a senior analyst at Green Street Advisors.