Brookfield to take control of 666 Fifth from Kushner Companies

Canadian firm will pay rent up front so Kushner Companies has funds to exit the troubled property

New York /
Aug.August 03, 2018 03:31 PM

From left: Ric Clark, Charles Kushner, and 666 Fifth Avenue (Credit: Max Touhey via Curbed NY)

Kushner Companies is nearing a deal to lease the office portion of 666 Fifth Avenue to Brookfield Asset Management for 99 years.

Brookfield had reportedly been in talks to buy a 49.5 percent stake in the troubled office tower and invest $700 million in equity to turn it around.

But now, Kushner Companies is on the verge of striking a deal to sell a leasehold position in the office condominum to Brookfield, the Wall Street Journal reported. Financial terms of the arrangement were not available, but instead of making payments over the term of the lease, Brookfield will pay the rent up front, the Journal reported.

That way, Kushner Companies would have money to exit the property, including paying down its $1.1 billion mortgage and buying out the stake held by Vornado Realty Trust for $120 million. With the ground lease, Brookfield will have total control of the property, according to the report.

Kushner Companies won’t lose much money on its investment, according to the Journal, but it’s unclear if the company will turn much of a profit on the building it paid a record $1.8 billion price for at the top of the last real estate cycle in 2007.

It’s unclear how much of the current debt on the property will be repaid under the deal with Brookfield.

In prepared remarks, Brookfield Property chairman Ric Clark said, “With its ‘Main and Main’ location, direct transportation access and currently unrefined physical characteristics, 666 Fifth Avenue has the potential to be one of New York City’s most iconic and successful office properties.

One of the building’s largest tenants, Millennium Partners, is considering leaving the 170,000 square feet it leases in the tower and relocating to 399 Park Avenue. [WSJ]Rich Bockmann


Related Articles

arrow_forward_ios
Big Silicon Valley firm grabs 34K sf in Soho
Big Silicon Valley firm grabs 34K sf in Soho
Big Silicon Valley firm grabs 34K sf in Soho
Behind the Vale: Conflict dogs Zelig Weiss and his hip hotel
Behind the Vale: Conflict dogs Zelig Weiss and his hip hotel
Behind the Vale: Conflict dogs Zelig Weiss and his hip hotel
Stephen Ross and Charles Kushner (Getty)
Stephen Ross, Charles Kushner, other titans paid no federal taxes for years
Stephen Ross, Charles Kushner, other titans paid no federal taxes for years
Last call? Cipriani facing possible foreclosure after mortgage default
Last call? Cipriani facing possible foreclosure after mortgage default
Last call? Cipriani facing possible foreclosure after mortgage default
Northpath Investments nabs Milford Plaza for $11M
Northpath Investments nabs Milford Plaza for $11M
Northpath Investments nabs Milford Plaza for $11M
Miki Naftali makes $73M dev play on Upper East Side
Miki Naftali makes $73M dev play on Upper East Side
Miki Naftali makes $73M dev play on Upper East Side
Bloomberg nabs 191K sf expansion with SL Green
Bloomberg nabs 191K sf expansion with SL Green
Bloomberg nabs 191K sf expansion with SL Green
New warehouse leases boosted by inflation, supply chain crisis
New warehouse leases boosted by inflation, supply chain crisis
New warehouse leases boosted by inflation, supply chain crisis
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...