The company owned by the family of President Donald Trump's son-in-law is reportedly negotiating to sell a US$400 million (NZ$578m) stake in a New York City skyscraper to a Chinese insurer with ties to that country's ruling party.
The New York Times is reporting that a company run by Jared Kushner's father is hammering out a deal with Anbang Insurance Group for a stake in the family's building at 666 Fifth Avenue. Bloomberg also reported on the deal. Jared Kushner is married to the president's daughter Ivanka and is a senior adviser to the president.
The deal would unite two politically powerful families in both countries and raise conflicts of interest questions.
A White House spokeswoman tells the Times that Jared Kushner previously sold his interest in the building.
The details of the agreement, which is being circulated to attract additional investors, were shared with Bloomberg. It would make business partners of Kushner Cos. and Anbang, whose murky links to the Chinese power structure have raised national security concerns over its US investments. In the process, an existing mortgage owed by the Kushners will be slashed to about a fifth of its current amount.
The document offers a rare look at a major deal by a close Trump associate and family member. It's unclear whether the deal could prompt federal review, as occurred when Anbang bought other properties, like the Waldorf Astoria Hotel in Manhattan. Anbang could also face review by the Chinese government, which has been clamping down on overseas investments and which has a range of pending issues with the Trump administration.
The proposed partnership is seeking additional participants through a controversial federal program known as EB-5, which is intended for economically distressed neighborhoods and provides residency permits to major foreign investors.
The deal would value the 41-story tower at US$2.85 billion, the most ever for a single Manhattan building: US$1.6b for the office section and US$1.25b for the retail section. The new partnership will refinance US$1.15b in existing mortgage debt.
"This is a huge, huge exit strategy for an office building," said Joshua Stein, a New York real estate lawyer. "It does sound like a home run of a transaction for Kushner and his group."
Scott A. Singer, president of the Singer & Bassuk Organization, said the terms struck him as "aggressive but not absurd," based on the net income and square footage metrics he was shown by Bloomberg. He said they were along the lines of what might be expected for a trophy asset at a prime location.
Kushner Cos. declined to discuss details of the plan or name the potential lenders or investors it is courting, saying the deal is not finalized. A company spokesman, James Yolles, said that Jared Kushner sold his ownership stake in 666 Fifth to family members so the transaction poses no conflict of interest with his White House role.
"Kushner Companies has taken significant steps to avoid potential conflicts and will continue to do so," Yolles said in a written statement.
Asked for comment, a White House spokeswoman said Kushner will recuse himself from any matter where his impartiality could be reasonably questioned, including an examination of the EB-5 program.
- Bloomberg and AP