The Real Deal New York

Kushner landed $500M investment from Qatar for 666 Fifth — then Anbang blew it: report

Mogul known as HBJ was in talks to buy stake at struggling tower
July 10, 2017 03:30PM

From left: Jared Kushner, rendering of 666 Fifth Avenue and Sheikh Hamad bin Jassim al-Thani (Credit: Getty Images and Zaha Hadid)

From left: Jared Kushner, rendering of 666 Fifth Avenue and Sheikh Hamad bin Jassim al-Thani (Credit: Getty Images and Zaha Hadid)

Kushner Companies tried — and failed — to land a $500 million investment from a former Qatari prime minister to rescue its struggling office tower 666 Fifth Avenue. And now, with Jared Kushner reportedly leading the push to ostracize Qatar in the Middle East, ethics questions could be raised.

Sheikh Hamad Bin Jassim Bin Jaber al-Thani, known as HBJ, negotiated with Jared and his father Charles Kushner throughout 2015 and 2016 and agreed to invest $500 million, the Intercept reported. But the deal, sources told the Intercept, was contingent on Kushner landing additional financing from other sources, which it failed to do, so it fell apart.

“HBJ basically told them, we’re good for 500, subject to a lot of things, but mainly subject to you being able to raise the rest,” one source familiar with the negotiations told the publication.

What killed the deal with HBJ was Anbang Insurance Group’s decision to back out of a potential partnership to re-develop the tower earlier this year. The Chinese insurer had initially considered investing $400 million and then borrowing another $4 billion to build a condominium and retail tower on the site in partnership with Kushner Companies. But by late March it killed the talks amid growing regulatory pressure in China.

(Another source, however, told the Intercept that the potential deal wasn’t contingent on the rest of the money being raised, and that HBJ’s investment was on pause while the partners reconsidered the overall deal structure.)

One unnamed source told the Intercept that Kushner has been fielding growing interest from investors since President Trump’s election victory, implying that the firm could be benefiting from its White House connections. “Around the New Year they were like, ‘LPs” — industry slang for limited partners, or investors — “are engaging more!’ It’s like, I wonder why?” the source said.

Anbang’s proposed investment in the tower — where the office space is worth less than the $1.2 billion interest-only mortgage, which is due in February 2019 — was widely criticized for creating potentials conflicts of interest for Jared Kushner, who is a key adviser in the White House. News of failed negotiations with HBJ will likely do the same. Jared was reportedly a driving force behind the Trump administration’s recent public attacks on Qatar over its alleged role in financing terrorists, the Intercept claimed. One source in the region told the Intercept that if the Qatari elite had known about the diplomatic woes ahead, it would have “gladly” funded 666 Fifth, even if it was a bad investment.

HBJ, who until 2013 controlled the sovereign wealth fund Qatar Investment Authority and still wields considerable political clout, is an investor in Harry Macklowe’s condo conversion project One Wall Street.  [The Intercept] Konrad Putzier