Kushner Cos to sell Chicago office tower at sharp discount

Onni Group in contract to pay $188M, far less than its purchase price a dozen years ago

Chicago Archive /
Nov.November 11, 2020 05:00 PM
Kushner Companies, Charlie Kushner and 225 West Randolph Street (Credit: Chris Hondros/Getty Images, and Kushner Companies)

Kushner Companies’ Charlie Kushner and 225 West Randolph Street (Credit: Chris Hondros/Getty Images, and Kushner Companies)

UPDATED, November 12, 4:37 p.m.: Kushner Companies is close to a deal to sell its lone Chicago office building for $188 million, a significant discount from what the firm paid for the property over a dozen years ago.

Kushner will sell the 853,000-square-foot building at 225 West Randolph Street to Onni Group, according to Crain’s. The Canadian firm would then spend about $154 million to renovate the property.

The deal is contingent on the City Council designating the building a landmark, and giving its owners an accompanying property tax break, according to the report, citing budget documents with the city Landmarks Commission.

Two years ago, Kushner agreed to sell the building to an Angelo Gordon-led venture, which has since transferred its purchase agreement to Onni, according to Crain’s, citing sources close to the deal.

Kushner Companies initially purchased the building 13 years ago for $276 million in a sale-leaseback with AT&T, according to Crain’s. The new sale would represent a 32 percent drop from the last sales price. AT&T’s 670,000-square-foot lease expires in 2022.

Kushner refinanced the building with a $184 million mortgage in 2017 from Apollo Global Management; the debt retired a $132 million mortgage, according to Crain’s. The refi agreement led White House ethics investigators to launch a probe in 2018 after an Apollo executive had meetings at the White House with Jared Kushner, President Trump’s adviser and son-in-law, and Charlie Kushner’s son.

In a statement after publication, Kushner president Laurent Morali told The Real Deal the “Chicago transaction has been a huge success for Kushner.” Morali added the company has “received approximately $275 million of triple net rental payments from AT&T over the last 12 years, which was used to reduce outstanding debt. The transaction will generate a substantial profit for Kushner.”

With the purchase, Onni is betting Chicago’s hobbled downtown office will return. Office vacancy in the city hit a nine-year high in the third quarter, according to a recent report from CBRE. Last year, Onni paid $78 million to buy the 17-story Union Tower in the Loop. [Crain’s]Keith Larsen


Related Articles

arrow_forward_ios
Laurent Morali and Charles Kushner (iStock)

Kushner buying sites near Delray Beach, Lake Worth for industrial and mixed-use projects

Kushner buying sites near Delray Beach, Lake Worth for industrial and mixed-use projects
Kushner Companies has filed papers to raise $100 million through a bond issuance on the Tel Aviv Stock Exchange. (Getty, iStock)

Kushner Companies plans $100M Israeli bond raise

Kushner Companies plans $100M Israeli bond raise
President Donald Trump and James Batmasian (Getty, White House)

Boca Raton real estate honcho James Batmasian gets presidential pardon

Boca Raton real estate honcho James Batmasian gets presidential pardon
Charles Kushner (Getty)

Charlie Kushner gets presidential pardon

Charlie Kushner gets presidential pardon
Jared Kushner (left); Charles Kushner (right); and Laurent Morali

Kushner eyes return to normalcy. Good luck.

Kushner eyes return to normalcy. Good luck.
From left: Sen. Ron Wyden, Rep. Joaquin Castro, 666 Fifth Avenue and Jared Kushner (Getty; Google Maps)

Democrats launch probe into Kushner’s 666 Fifth Ave bailout

Democrats launch probe into Kushner’s 666 Fifth Ave bailout
Charles Kushner and 18 Sidney Place (18 Sidney Place via StreetEasy)

Tenants get class-action status against Kushner in Brooklyn rent case

Tenants get class-action status against Kushner in Brooklyn rent case
Charles Kushner and 229 West 43rd Street (Getty, Google Maps)

Kushner Companies no longer delinquent on Times Square loans

Kushner Companies no longer delinquent on Times Square loans
arrow_forward_ios

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

Loading...