Nearly two years later, Brookfield Properties chairman Ric Clark is still defending the company’s decision to buy the 99-year ground lease at 666 Fifth Avenue from Kushner Companies for $1.3 billion.
666 Fifth Avenue
On Tuesday, Clark took a shot at “conspiracy theories” about the controversial purchase during a real estate luncheon.
“Notwithstanding the constant conspiracy theories in some of the media outlets, there was no quid pro quo,” he said at the event hosted by the Young Men’s/Women’s Real Estate Association in The University Club. “And we think this is a great building that we’re going to renovate.”
The 1.5 million-square-foot office tower acquisition came with a good amount of controversy. That was due in part to questions surrounding whether Jared Kushner, President Trump’s son-in-law and senior adviser, leveraged his foreign policy connections to secure a bailout for the property. The Qatari government has placed investments with Brookfield, and Kushner had supported a blockade of the Middle Eastern country.
This led to some speculation that Qatar was trying to curry favor with the Trump administration by bailing out Kushner Companies’ famously troubled office building, but both Brookfield and the Qatari government have insisted the country knew nothing about the deal before it went through.
The Qatar Investment Authority could not be reached for comment. Following the Brookfield purchase, the Qatar Investment Authority said it would try to avoid putting money in funds or other investment vehicles it does not completely control.
Clark — who also touched on subjects that included climate change and co-working at Tuesday’s event — provided more details about Brookfield’s big plans for 666 Fifth — which it has rebranded as 660 Fifth. The company will build a new façade with floor-to-ceiling windows and do slab cutouts in certain locations throughout the 41-story building to increase its height space, he said.
Brookfield intends to add rooftop space and terraces on the eighth, 10th, 11th and 15th floors as well, Clark said, comparing it to the renovation efforts Brookfield has done at 5 Manhattan West. The firm has estimated the total cost for the renovation at between $300 and $400 million.
“We’re very excited and think it’s going to be a great success,” he said. “So, it’s a little over 1.5 million square feet. If any of you have tenants, please come see us.”
Brookfield landed a $750 million mortgage for the property from ING Bank and a $300 million mezzanine loan from Apollo Global Management. The firm plans to put between $300 and $400 million worth of capital into the building and empty it out completely over the next 12 months as part of its renovation efforts.
RXR Realty CEO Scott Rechler previously told The Real Deal that he was not shocked when Brookfield acquired the troubled property, but it would be a heavy lift for them to turn it around.
“You have to make such a transformation that the market forgets what it was and reimagines it as what it’s going to be, which is difficult,” he said.