Pandemic may finally push Kushner Cos’ Times Square retail space into default
Holders of $85M mezz debt say they plan to foreclose on the 250K sf property
For the fourth time in five months, Kushner Companies has fallen behind on payments for the $285 million senior loan at its 250,000-square-foot retail space in Time Square.
And with the coronavirus pandemic shutting down most retail in New York City, the property is in more distress than ever, Crain’s reported.
Kushner has struggled to cover loan payments since the bankruptcy of tenant miniature landscape emporium Gulliver’s Gate, as well as rent troubles with National Geographic. It now appears unlikely that Kushner will secure new tenants before the coronavirus crisis subsides. And the firm may not be able to wait that long.
“For any project right now that urgently needs to lease retail and experiential space, it’s not happening until the dust settles,” Matthew Seigel of Lantern Real Estate Advisors told Crain’s.
Kushner had previously fallen behind on loan payments in November, January and February, but was able to make them within the 30-day grace period allowed by the loan terms.
The company also defaulted on two mezzanine loans at the property totalling $85 million in December. The loans were originated by SL Green and Paramount Group, but SL Green has since divested its loan. The current mezz lenders intend to foreclose on the property, according to Trepp.
Kushner acquired the retail condominium at 229 West 43rd Street, the old New York Times building, from Lev Leviev’s Africa Israel Investments for $296 million in 2015. At the time, the firm was led by Jared Kushner, President Trump’s son-in-law and senior adviser. [Crain’s] — Kevin Sun