Kushner breaks the silence: “This guy got Trump elected,” screams the headline for Forbes’ new cover story on Jared Kushner, the first real interview the developer has given since getting involved in Donald Trump’s against-all-odds presidential campaign. Kushner told the magazine he spearheaded his father-in-law’s incredibly successful digital outreach.
“I called some of my friends from Silicon Valley, some of the best digital marketers in the world, and asked how you scale this stuff,” he said. Eric Schmidt, chairman of Google holding company Alphabet, described Kushner as “the biggest surprise of the 2016 election.”
“Best I can tell,” Schmidt added, “he actually ran the campaign and did it with essentially no resources.”
Though Kushner’s involvement with Trump saw him take heat from some in the industry, it’s set, to borrow a Trumpian phrase, to pay off “big league.” He’s considering taking a formal role within the administration, and is reportedly in talks with lawyers to see if that would be feasible. But whether or not he’s a member of senior staff, he is certain to have pull within the Oval Office. Though New York real estate players have forever been a force in city and state politics, none has ever had even remotely that kind of influence on a president.
“Every president I’ve ever known has one or two people he intuitively and structurally trusts,” former secretary of state Henry Kissinger told Forbes. “I think Jared might be that person.”
Gray declines to run the green: Jonathan Gray, czar-apparent at the Blackstone Group, met with Trump last Sunday to discuss the possibility of being Treasury secretary. Gray has been a regular donor to Democrats over the years, and according to a Wikileaks hack of Hillary Clinton campaign chairman John Podesta’s emails, is said to be a Clinton admirer. But post-election, Gray talked of how Trump’s promise to lower regulation and boost infrastructure spending could be good for real estate.
A few days after meeting Trump, however, Gray withdrew himself from consideration, saying he “still has much work to do at Blackstone.” Considering that on his watch, the firm’s real estate group has leapfrogged past private equity to become its biggest business, sounds like a decent excuse. Blackstone, incidentally is a lender to Kushner on the Watchtower Building in Dumbo.
Real estate finance under Trump: Trump has talked about getting rid of the Dodd-Frank financial reforms that were passed in the wake of the financial crisis, reforms such as Basel III and the upcoming CMBS risk retention rules. He’s also discussed major investments in infrastructure, which, if funded by debt, may push up inflation and in turn interest rates.
Trump’s rhetoric about rewriting trade deals and being tough on the U.S.’ trading partners could bring even more investment into New York’s real estate market, according to Sam Chandan, a dean at Schack.
“Even though the U.S. may be the source of this increase in perceived global risk,” he said, “it may be counterintuitive, but that encourages capital to flow into the U.S.”
Disclosure: Remember all those times in “Million Dollar Listing” when a seller’s broker tries to bamboozle their colleague on the buy side? Well, a new California Supreme Court ruling would make that much trickier if both brokers belong to the same firm.
In Horiike v. Coldwell Banker, the court found that when a seller’s agent is dealing with a buyer’s agent from the same firm, they become an “associate licensee” and must properly investigate and disclose all important information related to the transaction. The ruling also applies to commercial brokerages dealing with dual-agent situations.
“[Buyers] hopefully will have some protections as a result of this case being affirmed by the Supreme Court, or maybe they will be more wary with a brokerage house that has both sides of the transaction,” said David Macey, an attorney who represented Hiroshi Horiike, the buyer, in the appellate case.
The California Association of Realtors protested the ruling, saying it would limit consumer choice. It’s not clear, however, why this would be the case: though the ruling sets a higher standard for dual-agency deals, it doesn’t restrict them. And since dual-agency deals make up a sizable chunk of the market, the ruling has the potential to increase transparency for a large number of buyers. And that’s a positive step.
(Paydirt is a weekly column that riffs on the biggest NYC real estate news of the moment, providing analysis and historical context on the deals and players that make this town tick. Read more from Paydirt here.)