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.