Jared Kushner’s Qatari miracle

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Jared Kushner’s Qatari miracle


Jared Kushner and his family business have a big problem.

In 2007, then 27-year-old Kushner made an audacious move while running his family real estate business: He bought an skyscraper in Manhattan — 666 5th Avenue — for $1.8 billion. It was the most ever paid for an office tower. And the timing couldn’t have been worse.

The tower was purchased at the height of the real estate bubble, just before the financial crisis. The commercial real estate market in New York City collapsed. Running out of cash, Kushner was forced to sell the lucrative retail space on the ground floor to Vornado Realty Trust, a more experienced real estate firm, to keep things afloat. Vornado later bought about half of the office tower.

But that wasn’t enough.

The tower is aging and the vacancy rate is high. The building is about one-third vacant and rent covers only about fifty percent of the mortgage, forcing the Kushners and their business partners to burn millions each month.

But the real issue comes in February 2019, when the tower’s $1.2 billion mortgage becomes due. Refinancing is really not an option since many real estate experts believe the mortgage exceeds the value of the tower.

Jared Kushner himself attempted to strike a deal with a Chinese company, Anbang, in the days following the 2016 election. But it evaporated upon further scrutiny of the terms of the deal, which were extremely favorable to the Kushners, and of Anbang’s murky connections to the Chinese government.

Enter the Qataris.

Three months after the inauguration and shortly after the Anbang deal fell through, Charles Kushner, Jared’s father, reportedly “made a direct pitch to Qatar’s minister of finance,” Ali Sharif Al Emadi, to provide new financing for 666 5th Avenue.

In March, Charles Kushner confirmed the meeting but described it as a courtesy and said he would never take money from the Qataris, presumably because it would present a conflict of interest due to Jared Kushner’s position in the White House.

I was invited to a meeting. Before the meeting, Kushner Companies had decided that it was not going to accept sovereign wealth fund investments. We informed the Qatar representatives of our decision and they agreed. Even if they were there ready to wire the money, we would not have taken it.

Now, they are taking the money.

The New York Times reports that the Kushners are “close to receiving a bailout of its financially troubled flagship building by a company with ties to the government of Qatar.” The deal is being struck with Brookfield Properties, “a publicly traded company, headquartered in Canada, one of whose major investors is the Qatar Investment Authority,” according to the Times.

So the Kushners may not be accepting funding directly through the sovereign wealth fund. But the money will come from a firm that is financed in large part by the same fund.

The financing would cover the tower’s mortgage, pay for renovations and buy out Vornado’s stake in the office tower. Brookfield would also take over management of the property.

The deal is “is likely to raise further concerns about Jared Kushner’s dual role as a White House point person on the Middle East and a continuing stake holder in the family’s company,” as the Times reports.

Kushner has been unable to obtain a permanent security clearance due to concerns that foreign government could use his business entanglements to gain influence.

The Qatari Investment Authority has been in the news recently.

Michael Avenatti — the lawyer representing Stormy Daniels, an adult film actress who accepted hush money to stay quiet about her alleged affair with President Trump — recently tweeted photos of Ahmed al-Rumaihi, a former Qatari diplomat who now heads up their investment fund, entering Trump Tower in December 2016.

Separately, a declaration in a lawsuit about a 3-on-3 basketball league alleges that al-Rumaihi bragged about his ability to influence former Trump national security adviser Michael Flynn with cash. Al-Rumaihi denies the allegation in the lawsuit.

Al-Rumaihi does claim that, around the same time, Michael Cohen demanded $1 million for his help influencing the Trump administration.

Whatever happened, the deal to save 666 5th Avenue comes at a time when Qatar is extremely interested in influencing the policy of the Trump administration. Trump is supporting a blockade of Qatar, imposed by Saudi Arabia, UAE, Bahrain, and Egypt, claiming the nation was supporting terrorists.

More recently, Trump has softened his rhetoric regarding Qatar. The Kushners’ deal is not yet finalized.






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