Vornado Has 'Handshake' to Sell Stake in NYC Tower to Kushners

[DonViejo]

Source: Bloomberg News


by David M. Levitt, David Kocieniewski, Caleb Melby

Updated 6 April 2018, 9:05 PM
Published 6 April 2018, 4:43 PM

(Bloomberg) -- Vornado Realty Trust says it has an informal agreement to sell its interest in Manhattan’s 666 Fifth Ave. to Kushner Cos., the firm run by the family of presidential son-in-law Jared Kushner.

The statement, released late Friday, seemed oddly timed and appeared to catch the Kushners off guard. It wasn’t clear whether they’d lined up financing for the more than $1 billion required.

In an annual letter to investors, Steven Roth, Vornado’s chairman and chief executive officer, said: “I believe we now have a handshake to sell our interest to our partner at a price which will repay our investment plus a mezzanine-type return,” referring to a type of high-interest loan. The letter was contained in a regulatory filing.

Roth implied the deal was tentative, saying “this situation continues to be fluid -- there can be no assurance that a final agreement will be reached or that a transaction will close.” Roth’s statement coincides with Passover and the Jewish Sabbath, and the Kushners, who are Orthodox, are unavailable until Saturday evening. Assessing the statement is particularly difficult because, in recent months, Roth and Charles Kushner have increasingly been handling key aspects of the discussions themselves, according to people familiar with the talks.

Read more: https://www.bloombergquint.com/business/2018/04/06/vornado-has-handshake-to-sell-stake-in-nyc-tower-to-kushner

[keithbvadu2]

1. Jared will just sell some more gov't secrets to raise the money.

Jared will just sell some more gov't secrets to raise the money.

He can get them from Dotard.

"mezzanine-type return” - Does that sound like a super negotiator?

Seller - yes... buyer - no.

[not fooled]

2. Exactly

He thinks his 666 worries are over.

Let's hope only until Mueller indicts him.

[karynnj]

3. Buying out his partner does NOT relieve him of the 666 problems

In fact, it is essentially doubling down. He is putting in more money -- which has to come from either selling other assets or additional loans -- to buy the other guy out. The amount of money added has to be huge because it is said to include paying off the huge loan coming due next February.

However, the money needed to do all of this gives the Kushners just full ownership of the building - presumably with an even HIGHER loan than the one that was due in February. Alternatively, Kushner might plan to sell other smaller assets to keep the loan the same or lower with a new loan. I think they are a private company, so - without someone like Mueller needing to determine the status of the company's finances, we will likely not know how they are really doing. (I suspect - as I suspect with Trump himself - their assets may be lower than their liabilities, but they have been given credit and pull money out to live the good life. I would bet that Charles Kushner might occasionally wish the company had stayed with their NJ apartments, that generated good money - even if they lacked the excitement of Manhattan real estate.)

The basic problem is that the building is not worth the cost he bought it for -- so the sum of all loans he has used to keep it afloat are greater than the value of the building. In fact, the building can not even generate enough income to pay the interest on the existing loan.

Jared's idea that they essentially rebuild the building into a much larger building has found no takers - because NO ONE thinks it would be a good money making opportunity.

Yet ... Trump argues that, like himself, Jared is a great deal maker!

[not fooled]

4. But does he think

he can just go get (more) loans by peddling influence? That would allay his concerns about the huge balloon payment coming due. And there probably is no shortage of foreign interests or governments willing to curry favor with this banana republic kleptocracy by bailing out donnie's son in law.

But, getting more shady loans might just give Mueller more to investigate and ultimately indict lil jared.

[karynnj]

5. He obviously thinks he can, but they are still LOANS - even if they are loans

no ordinary person could get at advantageous rates. As you noted ... more fodder for Mueller et al to investigate.

The point is that if Roth correctly characterized the buyout - definitely not a proven thing - Roth is getting out of a bad investment, keeping the the part he wanted - the retail spaces, with a good (or even great) rate of return on his part of the investment. This means that the Kushners are left with all the (undesirable) building, without the ground level retail, with MORE debt. More debt because of loans they got to buy Roth's nearly half and to buy out the holder of the balloon loan. (Alternatively, they sold enough other properties to raise the money to cover some of this.)

Either way, they would not have (unless there was blatant graft) improved their assets vs their liabilities. In addition, they now own 100% of a building that has not even paid its own interest payments since the brilliant Jared bought it.

[jmowreader]

6. I think they call this "crazy like a fox"

There is no market for $2 billion white elephants. Because Jared knows this, when he eventually defaults on his loans he'll be able to make his financiers offers they can't refuse.

[SergeStorms]

7. Which countries are the Kushners going to shake down now?

He's just about hit them all in the middle east. Russia is a big no-no, at least while Mueller is still looking the books over. I don't think any Asian countries are ignorant enough to jump on this shit-wagon. A huge loan payment due soon, and now another $1 billion for a buyout of Vornado?

Little Jared is between a rock and a hard place right now. Too bad, Jared. this wasn't supposed to happen when you married into the family of the biggest real estate tycoon in the galaxy. How will he be able to afford the upkeep of Ivanka? Plastic Surgery, collagen shots, botox injections, epidermal peels......and we haven't even touched the hair and nail treatments yet! Then there's the clothes, and shoes, and the jewelry!

If Jared can't afford to take care of Ivanka in the manner The Big Cheddar sees fit, he'll really be in the Trump dog house. That's Don-the-Con's future ex-wife we're talking about here (after it's been discovered Little Donnie has been shooting blanks all these years).

Of course after Don-the Con finishes paying off his legal bills (yeah, right!) HE might not have the money for Ivanka's upkeep either. Poor Ivanka! What's a plastic Barbie Doll to do?