Jared Kushner Tried and Failed to Get a Half-Billion Dollar Bailout From Qatar
Source: Intercept
Not long before a major crisis ripped through the Middle East, pitting the United States and a bloc of Gulf countries against Qatar, Jared Kushners real estate company had unsuccessfully sought a critical half-billion investment from one of the richest and most influential men in the tiny nation, according to three well-placed sources with knowledge of the near transaction.
Qatar is facing an ongoing blockade led by Saudi Arabia and the United Arab Emirates, and joined by Egypt and Bahrain, which President Trump has taken credit for sparking. Kushner, meanwhile, has reportedly played a key behind-the-scenes role in hardening the U.S. posture toward the embattled nation.
Trump himself has unsuccessfully sought financing in recent years from the Qataris, but it is difficult to overstate just how important to Kushner the investment at 666 Fifth Avenue is for him, his company, and his familys legacy in real estate. Without some outside intervention or unforeseen turnaround in the market, the investment could become an embarrassing half billion dollar loss. Its unclear precisely how much peril such a loss would put Jared, or his familys, finances in, given the opacity of their private holdings.
Anbang pulled out after the deal was criticized as a conflict of interest, given Kushners role in the White House. With Anbang, and its ability to secure a $4 billion construction loan, out, the Qatari condition wasnt met, and the Gulf deal fizzled, according to a source in the region. That chain of events was disputed by a source who said said the deal between HBJ and the Kushners wasnt dead, but on hold as the deals mix of loans and equity was reconsidered.
The revelation of the half-billion dollar deal raises thorny and unprecedented ethical questions. If the deal is not entirely dead, that means Jared Kushner is on the one hand pushing to use the power of American diplomacy to pummel a small nation while on the other his firm is hoping to extract an extraordinary amount of capital from there for a failing investment. If, however, the deal is entirely dead, the pummeling may be seen as intimidating to other investors on the end of a Kushner Companies pitch.
The Kushners purchase of 666 5th Avenue for a record breaking $1.8 billion in 2007 was capstone to an era marked by high prices and reckless amounts of debt. The Kushners invested $500 million in the building, and took out debt to cover the rest. But even at the height of a bubbling New York real estate market, there were clear signs that the price was too high and the debt was too much. The Kushners paid $1,200 a square foot, twice the previous per square foot record of $600, while records show that even with the building initially almost fully rented out, revenue only covered about two-thirds of familys debt costs.
When the financial crisis hit, rents when down, vacancies went up and the Kushners were short on cash to pay their debts. They sold off the Fifth Avenue retail space for $525 million and used the proceeds to pay off non-mortgage debt on the building. Then in 2011, the Kushners sold off just under 50 percent of the buildings office space to Vornado, as part of a refinancing deal with the publicly traded real estate giant.
The $1.2 billion interest-only mortgage is due in February 2019. The office space is worth less than its mortgage and there is no equity value left in the office section of the building, Jed Reagan of Green Street Advisors told the New York Times in April. (Because they sold the retail space to make payments on other debt tied to the building, the office space is the only part of the tower the Kushners still have a stake in.) As a result, the familys initial $500 million investment, once-heralded as an example of Jareds emergence as a brash real estate star, has for now effectively been wiped out. A massive refinancing and construction of a new tower that dramatically increases the buildings value is one way to try get out of that hole.
Read more: https://theintercept.com/2017/07/10/jared-kushner-tried-and-failed-to-get-a-half-billion-dollar-bailout-from-qatar/
HOLIEST OF CORPORATE CORRUPTION FATMAN (Trump) !!
THE DEFECATION IS GOING TO HIT THE OSCILLATION BEFORE JARED COMES UP FOR AIR !!!!
Marthe48
(16,949 posts)and whoring for dollars to throw after his failed and failing gold foil kingdom
keithbvadu2
(36,787 posts)dixiegrrrrl
(60,010 posts)He also tried for a huge loan from teh Chinese, and openly stated he earmarked 50 million of any loan for personal needs.
apparently even the 100,000 Saudis gave Barbie was not enough to help. and now she faces a huge lawsuit over the shoes.
but does have large large profits in China, where the shoes sell well as long as she is daughter of President.
yallerdawg
(16,104 posts)to rid ourselves of this family-based criminal fraud the deplorable assholes have foisted on us.
The more brilliant sunshine, the more their deep darkness is exposed!
Bengus81
(6,931 posts)No,actually very STUPID and now running around the World looking for cash for their failures.
Laxman
(2,419 posts)is accurate-and I have no reason to challenge what this article sets forth- then just what was going on here? Nobody makes an investment of that size without financial projections that justify risking that kind of capital. How is the decision to pay twice the going rate per square foot justified? How do you get into a deal that size without the reasonable expectation that the rental income would generate cash flow to even come close to covering the debt service? This isn't just a bad deal, this deal stinks. On its face it didn't make sense when it was made, let alone after the market conditions made it an unmitigated disaster. It was a disaster before the market tanked. How do sophisticated successful and experienced real estate operators like the Kushners make a deal like that? There has to be something else at play here. It just doesn't make sense. Jared's ego is doesn't cover it. And as for "improving the property" to increase the value-who the heck is going to make a construction loan secured by an underwater asset? What value would the Qataris get out of this even if they had bailed Kushner out? Something just doesn't smell right. What were/are the Kushners up to?
vkkv
(3,384 posts)keithbvadu2
(36,787 posts)BumRushDaShow
(128,905 posts)"TFEE - The Whole Covfefe".
Stay tuned for episode #2.
rusty quoin
(6,133 posts)Donald and Jared are setting records for incompetence. They couldn't make if they were born poor.
BigmanPigman
(51,590 posts)Money, money, money...Russia, Russia, Russia...Marcia, Marcia, Marcia.
forgotmylogin
(7,528 posts)And the evangelicals haven't picked up on that.