Conflict Accusations Swirl As Kushners Set To Receive $400mm From Chinese Firm On Real Estate Deal

Tyler Durden's picture

666 5th Avenue, ironically, has been a curse of Jared Kushner ever since he purchased the tower for a then-record $1.8 billion in 2007. It was supposed to be a signature move that signaled Kushner's intention to expand beyond his family's extensive holdings in suburban apartments to more prestigious urban properties in Manhattan. 

Unfortunately, Kushner's market timing couldn't have been worse with the 'great recession' paralyzing the commercial real estate market just months after his trophy purchase.  Four years later, with the property on the verge of insolvency, Kushner was forced to sell a 49.5% stake in the skyscraper to Vornado for an $80 million capital injection. Voranado later invested even more in the tower in 2012, purchasing the retail spaces at the building’s base from Kushner and others for $707 million.

Now, some 10 years after the original investment, the Kushner family looks set to receive a $400 million windfall from an unlikely, or perhaps not so unlikely depending on who you ask, new Chinese partner, Anbang Insurance Group.  Per Bloomberg, the potential deal is raising some eyebrows in Washington DC due to, among other things, Anbang's murky links to the Chinese power structure which raised national security concerns over its previous U.S. investments as well as some favorable debt relief terms contemplated in the transaction.

Anbang will pay for most of the building and take out a construction loan of more than $4 billion to convert the property’s higher floors into luxury residential units. The Kushners have agreed to invest $750 million in the retail portion of the building and will end up with a one-fifth stake in a project that the deal document says would be valued at $7.2 billion when completed. In addition to the $400 million from Anbang, the Kushners will receive another $100 million from other investors.

 

An unusual consideration in the refinancing plan is the proposal to pay off a part of the mortgage known as a "hope note," which was for $115 million when Kushner Cos refinanced its debt in 2011. The loan, which was made by Barclays Plc and has since been sold off to investors, is now valued at more than $250 million because of compounded interest. But according to the deal documents, the Kushners will settle the debt for just $50 million. The Kushners declined to discuss the agreement. LNR Partners LLC, which currently oversees the debt, declined to comment.

 

The plan also relies on the government program known as EB-5, which grants two-year visas and a path to permanent residency to foreigners who invest a minimum of $500,000 in projects that create jobs in economically distressed areas.

 

Supporters argue that the program, which is overwhelmingly used on deals involving Chinese investors, attracts foreign capital and creates jobs at no U.S. taxpayer cost. But some Homeland Security officials and the General Accounting Office have warned that lax vetting has threatened to turn the program into a mechanism for the government to sell visas to wealthy foreigners with no proven skills, paving the way for money laundering and compromising national security.

666 5th

 

The deal currently contemplated would value the 41-story tower at $2.85 billion, the most ever for a single Manhattan building, including $1.6 billion for the office section and $1.25 billion for the retail section. Of course, the sheer size of the transaction combined with a questionable foreign partner and the curious timing, coming just months after Trump took over the White House, have certainly raised some conflict of interest concerns in Washington DC.

"This is a huge, huge exit strategy for an office building," said Joshua Stein, a New York real estate lawyer. "It does sound like a home run of a transaction for Kushner and his group.”

 

"At the very least, this raises serious questions about the appearance of a conflict that arises from the possibility that the Kushners are getting a sweetheart deal," said Larry Noble, general counsel at the Campaign Legal Center. "A classic way you influence people is by financially helping their family."

 

The transaction would allow the Kushner Cos.’ investment in the tower to be salvaged by lenders and businesses that could have extensive dealings with the federal government, while also permitting the Kushners to buy back into the building’s more lucrative retail spaces and maintain a 20 percent stake.

Meanwhile, adding fuel to the conspiracy theory fire are rumors that Jared Kushner played a 'key role' in setting up Trump's recently announced meeting with Chinese President Xi Jinping which has been set for next month at Mar-a-Lago.

 

Of course, Kushner's company has downplayed conflict of interest concerns saying that he sold his financial interest in the building to families members.  That said, we suspect that won't be enough to alleviate the concerns of his political opposition who are all to eager to exploit any hint of impropriety.

Kushner Cos. declined to discuss details of the plan or name the potential lenders or investors it is courting, saying the deal is not finalized. A company spokesman, James Yolles, said that Jared Kushner sold his ownership stake in 666 Fifth to family members so the transaction poses no conflict of interest with his White House role.

 

“Kushner Companies has taken significant steps to avoid potential conflicts and will continue to do so," Yolles said in a written statement.

 

Asked for comment, a White House spokeswoman said Kushner will recuse himself from any matter where his impartiality could be reasonably questioned, including an examination of the EB-5 program. Anbang declined comment.

Meanwhile, Scott A. Singer, president of the Singer & Bassuk Organization, told Bloomberg the terms struck him as “aggressive but not absurd,” based on the net income and square footage metrics. He said they were along the lines of what might be expected for a trophy asset at a prime location.

So what say you?  Conspiracy theorists run amok or blatant abuse political power for personal financial gain?

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GRDguy's picture

An then Bang, it was all gone.

BullyBearish's picture

For those of you still harboring any hope for trump in draining the swamp, it's over...please take a look at this:

 

https://youtu.be/Vcd-yvudYSg

 

Stackers's picture

Lets not forget Biden's sons involvement in Ukrainian gas company deal that just "coincindentally" happened after the Victoria Nuland sponsored coup

joeyman9's picture

Yeah, but that was for the Obamites and.....Biden's son brought NOTHING to the table at all and risked nothing.

Escrava Isaura's picture

Nothing to see here in this swamp.

Move on.

“The naive (conservatives) doesn’t see the danger until it is at his throat.” — Noam Chomsky

 

 

Manthong's picture

Oh, F you all.

What part about Clinton-Obama oligarch did you not get?

Get hip.

Pinto Currency's picture

The Chinese would certainly like to have Trump out of there.
This would be a very cheap way to do it.

847328_3527's picture

Well, at least the rabid Saudi Arabian beheaders did not finance Hillary's campaign.....

 

..oh, wait a second....

Laddie's picture

Poor Donald he has enemy agents in his own family!!!

Soros backed Trump son-in-law, Jared Kushner, in real estate venture with $250 million

Meet the Jewish couple leading the Trump resistance

Paul Kersey's picture

Jared grew up in a big house, while his father lived in The Big House (with three hots and a cot).

The Management's picture

Guys - Jared Kushner was a billionaire Jew before Trump won.

Surprise! Nothing changed after the election.

Not really sure why this is important. Itsa building.

China just bought Hollywood from the Jews. The same jews that fucking HATE Trump on a daily basis.

All the Fed Head Jews for the last 50 - years ? Now thatsa story for sure !

China paying for access? This is just spoils of war.

beemasters's picture

Trump has to drain the swamp to fill it with his own.

SMD's picture

Swallow a pint more of Trump jizz, trailer-trash.

Escrava Isaura's picture

Only idiots think this can be fixed. I mean, a really idiot.

The US manufacturing sector has been mostly replaced by speculation on financial data whose underlying economic reality is a dark secret. Hundreds of billions of dollars in laundered drug money flow through Wall Street each year from opium and coca fields maintained by CIA-sponsored warlords and US-backed covert paramilitary violence. America’s global dominance depends on a continually turning mill of guns, drugs, oil and money. Oil and natural gas—the fuels that make economic growth possible—are subsidized by American military force and foreign lending.

https://www.amazon.com/Crossing-Rubicon-Decline-American-Empire/dp/0865715408/ref=pd_ybh_a_2?_encoding=UTF8&psc=1&refRID=D10VK44G66MB5K74TA7C

By the way, I don’t include the general population in this idiot. Idiot in this case are people that know the problem, you know, to a certain level, but still think it can be fixed. So, these people are the idiots.

 

chunga's picture

I don't see conservatives here, I see the tribe.

Escrava Isaura's picture

You might be right.

Mark Urbo's picture

Couldn't make the Russian BS stick...

..so roll in the China connection.

 

Poor butt hurt leftists

swmnguy's picture

True.  But Ukraine vs. China as a source of looting and graft?  As usual, the Bidens are pikers.

StopBeingstupid's picture

When Trump said people were celebrating on 911 the truth never brought up was , it was only the dancing Israelis that were busted for celebrating on that day also all the truck company was funded through Mossad . 

HRClinton's picture

666?  Kushner is the Jewish Messiah. You can't Trump that, Donald.

Chupacabra-322's picture

"Trump is already a fraud...

Presently ~ we're in the hands of Jared Kushner & Goldman Sachs...

Same as it ever was..."

His name was francis sawyer.

Paul Kersey's picture

"Presently ~ we're in the hands of Jared Kushner & Goldman Sachs..."

 

See if you can guess who ran money through Trump's real estate deals after his seventh BK, when the banks stopped lending to him.  Hint, it didn't even matter if the deals were successful.  Because, when it comes to Trump's nefarious business connections, Chupacabra, you are only scratching the surface.

Check into The Donald's affiliation with Tevfik Arifov, Felix Sater, Alexander Mashevich, Patokh Chodiev, Alijan Ibragimov, Boris Birshtein and morbidly obese, tribal mob kingpin, Semion Mogilevich.  The whole Russian election hacking thing is just a red herring.  It ain't Putin.  It's these Russo/Soviet mob guys that are the real prize.  Trump will never willingly let anyone get a look at his taxes, because it will show all these "loans". 

fwiw imho's picture

If for pure personal gain, do it the old fashioned way.  Give a few highly paid speeches.

jmack's picture

Or have a chinese agent funnel chinese army money into your campaign coffers.

SloMoe's picture

Maybe Kushner will invest in some small islands in the South China Sea? He could build a golf course there, for when the Japanese visit...

man of Wool's picture

Nah. Golf is Donald's speciality but Kushner could be just a front for Donald.

Once an Estate Agent always an .......

aliens is here's picture

Well, this is certainly disappointing. I hope this is just another fake news.

joeyman9's picture

Conspiracy theorists gotta spread conspiracies; that's what they do.

Sounds like a great deal!

GeezerGeek's picture

Shall we look into those relatives of Democrat women who benefitted from the government in one way or another? Pelosi's husband, maybe? Clinton's brother? I bet the list is huge.

SmittyinLA's picture

would Trump dump his son in law for political expedience? 

For a nickel 

next question

Megaton Jim's picture

Sure are a lot of (((Tribe))) names in this article!

Whopper Goldberg's picture

anti-semite alert.  Send in the ADL with a warrant for hate crime.

pound the vix's picture

Trump broke the cardinal rule.....Only poor idiots are allowed to be in government. 

hotrod's picture

Pay to Play?  Hopefully not but Kushners position probaly did not hurt.

 

onwisconsinbadger's picture

All of you muppets thought Drumpf is going to make America great again. He and his family are in for the money and nothing else. Drumpf was even pimping his daughter to a saudi prince. Sad !!!!

Whopper Goldberg's picture

Ya gotta admire those Jews. They make money on any situation.

Chupacabra-322's picture

When you have a Criminal Enterprise who has a monopoly on Counterfeiting money. What did you expect? They print it. And, lots of it.

Lucky Leprachaun's picture

Correct. No matter what way the ball bounces they seem able to swing with it. Apart from the 1930s in Germany...

LetThemEatRand's picture

Every Trumpbot who has no problem with this should ask themselves a simple question -- would they have the same reaction if it were Obama and his family.

I'm sick of the double standard most people have for the sins of their Team members versus those of the other Team.  This looks bad, period.  

Berspankme's picture

You are right of course but don't delude yourself. Obama and his minions were freely allowing Chinese billionaires to launder stolen PRC funds into real estate and never a peep. The real estate and banking lobby owned them too. USA is the money laundering capital of the world for despots worldwide and nobody ever says a word.

onwisconsinbadger's picture

Reminds me of Duke brothers from trading places. We make money either way. And Billy Valentine calls them bookies. Welcome to Drumpfland. Sad !!!

onwisconsinbadger's picture

Kush has a wife with a nice Tush. Now let's make some money.

Seasmoke's picture

I see why Ivanka is willing to suck his little dick.

Lucky Leprachaun's picture

Never trusted this slimy little fucker and his criminal father. But now he's embedded at the heart of state power.

Shue's picture

Drain the swamp my arse, he's topped it up with family and friends. So fucking disappointing.

SantaClaws's picture

If the Kushner family had set up a Kushner Foundation and Kushner Global Initiative, the Chinese could simply have donated $400 million to those "charities" for speaking fees by President Trump and the Kushners and everything would have been fine with the Dems.  Surprised the Kushners didn't follow the well-traveled roadmap.

swampmanlives's picture

Let's not forget that Jared's dad donated heavily to the Democrats.

Sinophile's picture

The money they are talking about is chump change to a Chinese real estate mogul.  It ain't no sweetheart deal.  It's just a deal.

FlKeysFisherman's picture

Good God, somebody throw that guy in an oven.