When 25-year-old law student Jared Kushner bought a stake in the New York Observer for $10 million last month, both his age and family history got cynical New Yorkers wagging their tongues.
Jared is the son of convicted New Jersey developer Charles Kushner, who served a prison term for tax evasion, falsifying campaign-finance reports and trying to influence a witness.
It’s been a media hullabaloo ever since, with media-centric Web sites such as Slate, Jossip, Gawker and Fishbowl commenting on the “boldfaced” boy who was born with a silver spoon in his mouth and who’s bought himself a “trophy” newspaper. “Congratulations on your ascension as a vanity press mogul,” wrote Slate columnist Jack Shafer. “You’re not the first… and you won’t be the last.”
While Kushner hopes to make his mark in New York circles with the newspaper, with a revamping planned that includes an expanded real estate section (see below), it’s clear that having a head for real estate is a family trait. Kushner, who earned his law degree this spring from New York University School of Law, already owns property in New York and plans on making more real estate investments, primarily in Manhattan and the Bronx.
As a Harvard undergrad, he bought seven residential properties in Somerville, Mass., upgraded the buildings, and sold them at a profit for $21 million. He also bought more property in Boston for $2.3 million and developed it into 16 condominiums, which he later sold for $4.3 million, according to press reports.
It’s something of a family affair: Kushner’s real estate partners have included his siblings Dara, 27, Nicole, 23, and Joshua, 21, and sometimes his mother Seryl and father Charles. Kushner family properties in the city include 2403 Grand Concourse in the Bronx and 720 Madison Avenue and 26 East 64th Street in Manhattan.
Kushner said he plans to buy property north of 96th Street, but said the identity of his partners is “a private matter.” Although Joel Seiden, one of Charles Kushner’s long-time partners, is still listed as an owner of family properties, he is no longer working with the Kushners, said Alan Hammer, the acting chairman of the Kushner Companies.
But the young Kushner said he has the backing of “lending partners who have been great and believe in me.”
In the possible deal above 96th Street, Kushner said he has his eye on a package of residential buildings that has been owned by the same person for a long time, though veteran brokers in the area could only speculate on the seller’s identity.
Major landlords north of 96th Street include Luca Capin of Capin & Associates as well as Baruch Singer, who owns more than 25 properties there. There’s also the San Francisco-based Prana Growth Fund, which spent $138 million for 22 properties in the area. The Pinnacle Group, which is trying to evict thousands of tenants as it seeks to upgrade its properties, has about 23 apartment buildings above 96th Street, many of them five-floor walk-ups on Amsterdam and Columbus avenues.
Kushner said he once went up against Singer in a bid for several buildings and lost.
“He, at the time, paid very aggressive prices,” said Kushner of Singer. “His foresight turned out to be very much on the mark.”
Kushner said his strategy in general will be to buy undervalued assets, renovate and add amenities, and then hold the properties while they appreciate, a strategy he may have learned in part from his father, who owns and operates more than $2 billion worth of residential property in New Jersey and other states.
The additional cash flow generated by real estate investments may come in handy at the Observer, at least at first. The 19-year-old paper has never turned a profit and is said to lose about $2 million a year.
“We had a very big, significant loss last year,” conceded Observer editor Peter Kaplan.
But he thinks the energetic Kushner is the right person to turn the paper around.
“Jared is a businessman and I will say that he is taking a new approach to this newspaper that is appropriate to new media, and a new generation of publishers.”
Real estate mogul’s paper to up real estate coverage
Budding press tycoon Jared Kushner plans to increase the real estate his New York Observer devotes to, well, real estate.
He said he and editor Peter Kaplan plan to expand coverage of real estate at the salmon-colored weekly broadsheet.
“I want journalism in the newspaper that describes transactions, big shots, sales and the general economy of New York real estate,” said Kaplan. “Real estate, show business, politics and culture. These are places where we make a lot of money.”
Would the Observer write a story about Jared Kushner’s real estate dealings in his new section?
Kaplan credits Kushner with having “everything you want in an owner,” but he said the paper’s business and editorial sides will remain firmly aloof from one another.
“The wall is up between church and state,” Kaplan said. “I used to work for the New York Times and every newspaper has sensitivities in terms of the owner of the paper and news. So, if we have a few areas where we do not go in with a jackhammer, there will be some.”
But, Kaplan added, “If Jared does something newsworthy, we will cover it.”