The Real Deal New York

Jared Kushner set to step down as CEO of Kushner Cos.

Developer will divest his stake in 666 Fifth, spokesperson says

January 08, 2017 10:32AM
By Hiten Samtani

Jared Kushner, 666 Fifth Avenue and Wu Xiaohui of Anbang

Jared Kushner, 666 Fifth Avenue and Wu Xiaohui of Anbang

UPDATED, 4:02 p.m., Jan. 8: Jared Kushner is poised to step down as CEO of Kushner Companies, his attorney told the New York Times. The move comes as Kushner, who heads one of New York’s most active real estate investment and development firms, continues to play a central role in the transition team of his father-in-law, President-elect Donald Trump, and is expected to be one of the most influential advisers in his administration.

Mr. Kushner TRData LogoTINY is committed to complying with federal ethics laws, and we have been consulting with the Office of Government Ethics regarding the steps he would take,” Jamie Gorelick, a partner at WilmerHale who is representing Kushner, said in a statement to the Times, which first reported the news Saturday.  Gorelick added that Kushner will divest his stake in “substantial assets,” and Risa Heller, Kushner’s spokesperson, said that one of them would be 666 Fifth Avenue, the hulking office and retail building he bought for a record $1.8 billion in 2007. Kushner Companies, however, has no plans to sell 666 Fifth at this time, a spokesperson added. 

On Saturday, the Times reported that Kushner had engaged in a series of talks with Wu Xiaohui, the chairman of Anbang Insurance Group, an opaque Chinese conglomerate that owns the Waldorf Astoria. On Nov. 16, just days after the election, Kushner met with Wu at a private dining room in the Waldorf, according to the newspaper. The two were hammering out a deal to bring in Anbang as a joint-venture partner on 666 Fifth, and Wu expressed a desire to meet Trump.

The Times report illustrates the web of potential conflicts of interest that Kushner, 35, could face in a Trump administration. He is said to be Trump’s closest adviser, having a hand in everything from Trump’s pick of Goldman Sachs president Gary Cohn as chief economic adviser, to his policies on Israel.

“When Trump has questions or wants to talk to someone who he really trusts and respects, I would imagine he’ll call Jared,” Robert Ivanhoe, Kushner’s longtime real estate attorney, told The Real Deal just after the election in November. 

In New York, Kushner Companies has made at least $3 billion worth of acquisitions since 2005, according to Real Capital Analytics. These deals include a large multifamily portfolio in the East Village, the $340 million purchase of the Watchtower Building in Dumbo, and the $345 million purchase of a nearby development site at 85 Jay Street. 

Matthew Sanderson, former general counsel to Senator Rand Paul’s presidential campaign, told the Times that Kushner’s negotiations with Anbang, though they  “might not be illegal under the conflict-of-interest rules,” do “raise a strong appearance that a foreign entity is using Mr. Kushner’s business to try to influence U.S. policy.” He described Kushner’s announced intention to step down from his firm and sell certain assets as a “half-measure” that “still poses a real conflict-of-interest issue and would be a drag on Mr. Trump’s presidency and cause the American people to question Mr. Kushner’s role in policy making.”

Clarification: This story was updated to clarify that though Jared Kushner intends to divest his stake in 666 Fifth Avenue, his firm, Kushner Companies, has no plans to sell the asset at this time. 

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