Jared Kushner at 666 Fifth Avenue

Despite a recent wave of high-priced, high-profile retail deals, Jared Kushner’s 666 Fifth Avenue is proving no different than many other over-leveraged Manhattan buildings purchased at the height of the real estate market: it’s now running low on cash. According to the Wall Street Journal, Kushner, who led his family’s record $1.8 billion purchase of the office and retail tower in early 2007, is negotiating with lenders to recapitalize the property in exchange for a modification of its $1.22 billion mortgage. The building is now around $3.5 million-per-month short on its debt service payments, and its reserve fund has dwindled to just $10 million, sources said. Comments

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Swiss watch retailer Swatch signed a 15-year lease today valued at $80 million for the
remaining 2,000-square-foot ground-floor retail space in the commercial condominium
at 666 Fifth Avenue owned by a joint venture of the Carlyle Group, Kushner Companies
and Crown Acquisitions, sources close to the deal said.
The rent for the space with a 20-foot wide frontage squeezed between Hollister and
Uniqlo, was approximately $2,000 per square foot, the source said. Bradley Mendelson, a
top retail broker at Cushman & Wakefield, represented the landlord. [more]

In one of the city’s largest-ever retail condominium deals, Spain’s Inditex Group has agreed to pay $324 million to purchase 32,000 square feet at 666 Fifth Avenue for a new flagship Zara store, the company announced today. The space, formerly an NBA store, is roughly one-third of the 90,000 square feet purchased by Stanley Chera’s Crown Acquisitions, the Carlyle Group and Kushner Companies for $525 million in 2008, according to the Wall Street Journal, which originally broke the news of the deal. The rest, which is currently leased by Uniqlo and Hollister, is also on the market. The purchase price for the Zara space includes the buyout of the remaining time on the NBA’s lease, which sources said had less than three years before its expiration. Uniqlo’s lease at 666 Fifth last year, in which it agreed to pay $300 million over 15 years, was among the city’s most expensive retail leases ever. [WSJ]

Max Spann Real Estate & Auction, an expanding East Coast auction house, has signed on to open its first New York City office at 370 Lexington Avenue, at 41st Street, the company announced today. Max Spann, which has held auctions and competitive-bid events nationwide — including in New Jersey, Pennsylvania and Massachusetts — over the past year, is now busy planning more auctions for New York and several other cities. The new office will be led by Kushner Companies veteran Jeffrey Freireich and is intended to help the company take advantage of a shaky real estate market in which auctions have gained in popularity, the company said in a statement. TRD [more]

Charles Kushner and the Puck building

Seattle-based outdoor gear retailer Recreational Equipment has inked a deal to debut its first New York City store at Kushner Companies’ landmarked Puck Building at 295 Lafayette Street in Soho, the company announced today. The 39,000-square-foot, three-floor space will have a bike shop and “Outdoor School” courses in addition to its stock of apparel and gear when it opens in the fall of 2011. Recreational Equipment currently has 112 retail stores nationwide and is undergoing an expansion in the Tri-State area, with a Norwalk, Conn. store slated to open next month and additional locations in the region expected to be announced in the coming weeks. Terms of the lease were not disclosed, but Susan Kurland of CB Richard Ellis represented the tenant, while Lori Shabtai of Winick Realty represented Kushner. TRD

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Manhattan-based Kushner Companies is looking to buy AIG’s equity stake in a 17,000-apartment portfolio, according to Bloomberg news, as the insurance giant faces mounting pressure to pay back its $182.3 billion government bailout. Kushner had sold off the collection of apartments in 2007 for $1.9 billion, in what Jared Kushner, son of company founder Charles Kushner and a principal with the firm, described as a “strategic shift” away from suburban property ownership. The sale came on the heels of Kushner Companies’ purchase of 666 Fifth Avenue for $1.8 billion — which, at the time, was the most ever paid for a single building in the country. Kushner has offered between $165 million and $190 million for the equity interest, according to sources close to the deal. The portfolio of properties includes mostly middle-income, suburban apartment buildings in Pennsylvania and New Jersey. [Bloomberg]

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Experts say that 666 Fifth Avenue’s record-breaking retail lease signing last week is a sign of market recovery, according to the Wall Street Journal. Japanese retailer Uniqlo nabbed 89,000 square feet of space in the building, owned by the Kushner Companies, Crown Acquisitions and the Carlyle Group, for a record $300 million over 15 years. The retail space at the Midtown skyscraper is fetching an average rent of $2,500 per square foot, trumping the rents seen at several noted shopping neighborhoods worldwide, including the Champs-Elysees in Paris and the Causeway Bay in Hong Kong. [more]

From left: Charles Kushner, chairman of Kushner Companies; company principal and son Jared Kushner and 666 Fifth Avenue

It’s been a good week for the Kushner Companies at 666 Fifth Avenue, the 41-story office tower between 52nd and 53rd streets. Japanese retailer Uniqlo recently signed on to pay a record $300 million over 15 years for the building’s 100,000-square-foot retail condo that formerly housed Brooks Brothers. Today, the Post reports that energy-focused law firm Vinson & Elkins has renewed its lease and taken an additional 6,972 square feet, bringing its total to roughly 81,000 square feet at the property. The firm’s original lease was set to expire in November. Last year, law firm Orrick Herrington left 666 Fifth Avenue, putting Kushner in a bit of a crunch as it negotiated with its special servicer, something the company contends was their choice and was not due to a default.
[Post]

From left, Charles Kushner, chairman of Kushner Companies, company principal and son Jared Kushner and 666 Fifth Avenue

The $1.215 billion securitized loan secured by the Kushner Companies
iconic Midtown office building at 666 Fifth Avenue was transferred to
special servicing yesterday as part of an effort to restructure the
loan, a company spokesperson told The Real Deal in a statement. Kushner
bought the building, located between 52nd and 53rd streets, for $1.8
billion from Tishman Speyer Properties in January 2007, at the time the
highest price ever paid for an office building. “The transfer of
the 666 Fifth Avenue loan was done at the request of Kushner Companies,
so that it could more easily engage in productive discussions with the
lender. The loan is not currently in default,” the statement said. Peter
Slatin, editorial director of commercial data tracking firm Real
Capital Analytics said the move was part of a trend in owners seeking
to reduce their debt. “They are clearly hoping to take advantage
of the increasing willingness of lenders to restructure to avoid what
could be a challenging situation since they not only bought at the top
of the market, they defined the top of the market,” Slatin said. [more]

Ivanka Trump, Jared Kushner, and 500 guests gathered at the Trump National Golf Club in Bedminster, NJ, yesterday for the merging of two massive New York real estate families. Ivanka Trump, the daughter of real estate mogul Donald Trump, and Jared Kushner, owner of the New York Observer and son of New Jersey real estate developer Charles Kushner, became engaged July 16 this year. The Kushner-Trump wedding drew such bigwigs as Andrew Cuomo, Sheldon Silver, Rudy Giuliani and Amir Korangy, publisher of The Real Deal. The bride, who said via Twitter that she went on a “gorgeous hike” prior to the nuptials, wore a lace-sleeved gown, reportedly inspired by Grace Kelly. The weekend marriage will be followed by another, reportedly twice as large, reception this Wednesday, after which the couple plans to honeymoon in Africa. [Post] and