The Donald’s son-in-law, Jared Kushner, is in a pickle.The 30-year old sank $1.8 billion into a Fifth Avenue skyscraper, at the height of the real estate boom — at the time, it was the highest price ever paid for a single building — expecting it to rake in $120 million in annual office rent.
Instead, the tower will rake in $30 this year, the WSJ says.
And vacancy in the building is 30%.
Now, Kushner is facing a default deadline.
According to the WSJ,
As of March, the aluminium-panel-clad skyscraper, where retailer Uniqlo is planning its flagship store, was about $3.5 million-a-month short on debt service… Only $10 million remained in a reserve fund used to service the property’s $1.22 billion mortgage, which is tied to the office portion of the building. Its revenues are only one-fourth the amount forecast in 2007.
Mr. Kushner is now facing off against a set of lenders that include private-equity heavyweights Starwood Capital Group and Colony Capital LLC. Talks have accelerated recently, with Mr. Kushner offering to put in tens of millions of dollars to recapitalize the property in exchange for some form of relief.
Kushner says his family — which made their vast wealth in real estate — is willing to invest more cash, they just to come to a “mutually satisfactory” deal with the servicing agent.
The Donald has faith though: “He is a very smart young man. I think it will come out well for him and everybody.”