Brookfield agrees to a 99-year lease for the office portion of the building
Brookfield Asset Management has signed a 99-year lease for the office portion of Kushner‘s 666 Fifth Avenue. With a $1.2 billion mortgage coming due in February, the deal could not have come at a better time for Kushner.
Unique leasehold structure: Rather than paying the rent on an annual basis, Brookfield will give Kushner an upfront sum that will allow the company to pay off the outstanding debt on the building, according to Bloomberg.
The history: Kushner paid $1.8 billion for the property in 2007. Following the recession, the company sold a controlling stake in the retail space for more than $500 million and used most of the proceeds to repay debt. But that wasn’t enough to stabilize the property… In 2011, Kushner brought on Vornado as a 49.5% partner and renegotiated $1.2 billion in debt.
Juicy anecdote: When Charles Kushner was sent to prison in 2005, the family asked PR Guru Howard Rubenstein how to rehab the Kushner name. He suggested that Jared buy a newspaper, marry the daughter of a rich New York family, and acquire a trophy asset.
Jared listened… He bought the Observer, married Ivanka, and acquired 666 Fifth Avenue. [Bloomberg]