Brookfield mulling $700M equity injection into 666 Fifth Avenue: report

The company has not yet finalized its reported deal to buy Vornado's 49.5 percent stake in the tower

TRD New York /
Jun.June 15, 2018 12:18 PM

Ric Clark and 666 Fifth Avenue (Credit: Curbed NY)

Brookfield Property Partners is considering a $700 million equity injection at 666 Fifth Avenue, where it already plans on acquiring a 49.5 percent ownership stake from Kushner Companies.

It’s also looking to bring in a new $1 billion loan on the property, according to Commercial Mortgage Alert.

The new capital would be used to update the aging office tower as well as pay off the building’s existing $1.4 billion in debt, which comes due in February. Kushner Companies, which would still own 50.5 percent of the building, would not put up any additional capital on its own, CMA reported.

It’s not clear if the massive equity contribution by Brookfield would up its ownership in the tower. A source who spoke to CMA said the property’s current valuation was somewhere between $1.2 and $1.3 billion.

Vornado Realty Trust originally purchased the 49.5 percent stake in 666 Fifth Avenue in 2011 and this year announced it would sell it back to Kushner Companies generating “net proceeds” of $120 million. Brookfield, in turn, is expected to buy that stake from Kushner.

“We think the strategy for that building to enhance value is right up our alley, it’s something that we’ve done multiple times,” Brookfield’s Ric Clark said at the Catalyst real estate conference last month.

Earlier this month, The Real Deal published an exclusive interview with Charles Kushner in which he discussed his abandoned plans that would have transformed the trophy property into a 1,400-foot luxury condominium, hotel and retail complex. “The old plan – we did scrap – which the press has reported as crazy or unattainable – our logic, it was not a crazy logic at all,” Kushner said. “We had term sheets signed for several billion dollars of equity, but it’s such a big project and would require so much sovereign funds that it’s just not something that we can execute without creating a lot of havoc.” [CMA] — Will Parker

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