Jared Kushner arrives to a swearing-in ceremony of White House senior staff in the East Room of the White House on Jan. 22, 2017 in Washington, D.C. (Photo : Getty Images)
A company owned by the family of Jared Kushner, President Donald Trump's son-in-law and senior adviser, is set to earn more than $400 million from a major Chinese holding firm for investing in the Kushner's posh office building in Manhattan, according to a report from Bloomberg on Monday.
The deal, whose details are being circulated to attract additional investors, is valued at $4 billion and provides the Kushners with a sizable cash payout from Anbang Insurance for a financially struggling property and an equity stake in a new partnership, the report said.
The building, a 41-story marquee tower located at 666 Fifth Avenue, was acquired by Kushner Companies for $1.8 billion in 2006, which at the time was the highest sales price for a single building in Manhattan. Under the partnership with Anbang, the tower's value will rise to $2.85 billion as well as refinance $1.15 billion in existing mortgage debt owned by the Kushners.
The deal has been criticized by real estate experts, who describe the terms of the transaction as unusually favorable for the Kushners, the Bloomberg report said.
"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 Singer, president of the real estate finance intermediary Singer & Bassuk Organization, told Bloomberg that the terms were "aggressive but not absurd."
The proposed partnership has also drawn controversy for seeking additional participants through a federal program known as EB-5, which is intended for economically distressed neighborhoods and provides residency permits to foreign investors
Kushner Cos. declined to discuss details of the plan or name the potential investors or lenders to the media, saying that the deal has not been finalized. A company spokesman, James Yolles, said that Jared Kushner sold his ownership stake in 666 Fifth Avenue to family members so the transaction poses no conflict of interest with his relationship to Trump.
"Kushner Companies has taken significant steps to avoid potential conflicts and will continue to do so," Yolles said in a press statement.
Anbang has yet to issue a comment as of press time.
Reuters reported earlier in January that Chinese group was in talks to invest in a project to redevelop the New York City building.
Anbang, established in 2004 as an auto insurer, has become one of China's most aggressive buyers of overseas assets in the past two years. As of this year, Anbang U.S. investment has led to approximately $30 billion in acquired properties including a record $2 billion deal for the Waldorf Astoria Hotel in Manhattan.
